Welfare Reform Bill

Public Bill Committee, 28 November 2006.

Jimmy Hood (Labour, Lanark and Hamilton East)

May I remind hon. Members that the Bill has been carried over from the last Session and reprinted to incorporate the amendments made by the Committee? Members should ensure that they are using the correct copy of the Bill, which is Bill No. 1 of the current Session.

Clause 36

John Penrose (Conservative, Weston-Super-Mare)

I begto move amendment No. 267, in clause 36, page 29,line 40, leave out ‘may’ and insert ‘must’.

I welcome you back to the Chair, Mr. Hood, following our brief break. It is hard to resist the temptation to begin by saying, “As I was just saying”, after two or three weeks away for the Queen’s Speech, but I shall try.

The amendment is aimed at preserving the option of making direct payment of housing benefit to landlords without going via claimants, should that be necessary. The Committee had a useful and informative discussion—I think that there was cross-party agreement on this point—about the importance of trying to expand financial literacy and of deepening the level of bank account penetration among claimants of benefits in general and of housing benefit in particular. There is still great support for that proposition.

However, there are occasions when it would not necessarily be appropriate for some groups of claimants to receive housing benefit directly, and when it would be appropriate to pay the benefit directly to the landlord instead. Examples of those to whom it might be dangerous to make direct payments include drug addicts who are not yet recovered, who may be in the process of recovery from their addiction. For such people, the difficulty of dealing with financial affairs and, to them, comparatively large amounts of money, which arrive in one lump every week or so, will create an impossible degree of temptation that would be impossible to manage, given the chaotic lifestyle of people who are in the depths of addiction. Clearly, there are some groups of people for whom direct payment may not be appropriate. The amendment seeks to ensure that there will be a guaranteed facility to preserve the option of direct payments of housing benefit to landlords if necessary.

A number of landlords are very concerned about losing such an option as a way of receiving the benefit. They regard it as an essential piece of certainty and of protection of the rent stream. Many have said that they are concerned enough to consider getting out of the sector and stopping providing accommodation if the option of direct payment ceased.

The Opposition are therefore not asking that the proposed measure should apply to everybody. We completely support the notion that there should be an extension of bank accounts and financial literacy to the majority of people claiming housing benefit, but we feel that for some groups, at some stages, it will be important to maintain direct payment. We therefore hope that the Under-Secretary can give us some reassurance on the matter.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

May I also welcome you back to the Chair, Mr. Hood, and say what a pleasure it is to be back here under your guidance for the final sittings of the Committee? I shall pass up the chance of making a meteorological reference at this stage—perhaps I will do so on Thursday for the Committee’s pleasure.

I would like to question the Under-Secretary on a further point that relates directly to the provisions that assist those who until now would have been likely to have their housing benefit paid directly to their landlord, but who might well be required under the new system to take responsibility for paying rent themselves, for all the reasons that the hon. Member for Weston-super-Mare has rightly outlined. That is an idea that I would support, subject to the caveats that he has entered.

In the pathfinder areas, significant resources have been provided to give financial advice, such as support from citizens advice bureaux, to enable people who are going through that transition, and are perhaps paying their rent directly for the first time, to cope with it. Advice and support will be provided to them, for example in the process of opening a bank account or taking advantage of other such payment mechanisms. As the local housing allowance is rolled out throughout the country, it is important that provisions for that sort of advice and support are made as intensively in the areas where the new benefit is being rolled out, as in the pathfinder areas.

Having talked to claimants and administrators in the pathfinder areas, I know that the provision of that advice and support, principally through Citizens Advice, has been a valuable part of the package to ensure a smooth transition from the old to the new benefit. There are also those claimants who are not vulnerable according to the new vulnerability assessment but none the less need a bit of help to get started in paying rent for themselves. I would be grateful if the Under-Secretary outlined the plans that the Government have to provide that sort of support and advice when the new local housing allowance is rolled out.

Anne McGuire (Labour, Stirling)

Thank you, Mr. Hood. It is a delight to be back here this morning. I have suffered withdrawal symptoms for the past two weeks when we have not been here, as I am sure all my colleagues have done. I missed the weather forecast from the highlands and islands—so much so, that I have been forced to listen to the shipping forecast at10 minutes to 1 in the morning on Radio 4, before hearing the in-shore forecast for fishermen. Anyway, that is enough of that. Those of us who were in the highlands and islands at the weekend know that when a force 10 gale blows, it can fair blow. We have great understanding and sympathy for those who are in the margins, in the more fragile areas, in terms of the weather, in the United Kingdom.

The hon. Members for Weston-super-Mare and for Inverness, Nairn, Badenoch and Strathspey have raised some positive points on financial inclusion. They have also highlighted the issue of those who are not able to manage their own funds. We agree that direct payment is not appropriate for all claimants. In the pathfinder areas, we put in place safeguards to ensure that, if a claimant could not manage their own affairs, payment went to the landlord. Having built that in in pathfinder areas, we would have the same intention when rolling out the programme, because it has worked well.

On funding during the roll-out, I am not sure whether we have yet received recommendations from the Select Committee on the Treasury, but I understand that it is looking at the issue of financial inclusion. I can confirm that we will provide funding alongside the local housing allowance roll-out to support local authorities in the provision of money advice. The pathfinder evaluation has demonstrated that the take-up of such advice was lower than we anticipated, so it may well be that people are more able and willing than expected to take responsibility, although the system has never given them that responsibility. Limiting the roll-out to new claimants and those moving house will help to ensure that the provision of advice is manageable. We recognise the operational issue that exists.

We need to continue to explore more coherent approaches to provide generic financial advice. It is not just a matter of rent or rates when people have serious financial difficulties: they are caused by a cocktail of financial pressures. Having said that, we ask the hon. Member for Weston-super-Mare to withdraw the amendment because it would restrict the Secretary of State’s flexibility in such matters. The issue that he raised is important, but we have built it into the system and the amendment would not add anything to the Bill. I am happy to put on the record the fact that we recognise that some vulnerable people are unable to manage their finances in quite the way that we would want them to. We have built in such support and, having highlighted such issues, I believe that the amendment could be withdrawn.

John Penrose (Conservative, Weston-Super-Mare)

On the basis that the Under-Secretary has put on the record the fact that she envisages that an element of direct payment will be retained, particularly for vulnerable people, I beg to ask leave to withdraw the amendment.

Clause 38

Tim Boswell (Conservative, Daventry)

I, too, welcome your return to the Chair, Mr. Hood. In the spirit of my hon. Friend the Member for Weston-super-Mare, I wish also to comment on the fact that we could use the words of Louis de Leon, a lecturer at Salamanca university who had tangled with the inquisition. He was imprisoned for five years and, on his return, he started his lecture, “As we were saying yesterday”, although he did say it in Latin.

On that basis, I am sure that I, too, might be allowed to make a short personal statement to the Committee although, during the interregnum, I have not been subject to a period of imprisonment or, indeed, cruel and unusual punishment. However, I have retired from the Opposition Front Bench and I assure avid Labour Members that I have not done so from a desire for a policy disagreement or even a particular sanguinary coup, but, as they say, it is to spend more—

David Ruffley (Conservative, Bury St Edmunds)

Will my hon. Friend allow me to say on behalf of all his colleagues on the Opposition Front Bench that we hope he comes back soon?

Tim Boswell (Conservative, Daventry)

That is ingratiating and delightful. It may not be an offer that I would be entirely pleased to accept after 16 years, but there we are. I simply want to say that the Bill covers a hugely interesting subject. I welcome the Committee, the tone of which has been positive. Now let me get on with the points that I am anxious to make.

Given that we have moved on to the exchange of personal information, it is right that the Committee should pause for a moment to reflect on some issues. I have a strong interest in human rights and civil liberties, which I shall not rehearse at length. In fact, it is shared by many members of the Committee and we just need to get the provisions right.

For the avoidance of doubt, I wish to say that it is not wrong to provide for better data sharing in relevant areas subject to the appropriate safeguards. That is not the issue. The assurances that we seek from the Ministers are whether those safeguards are appropriate or sufficient. I wish to pick out three points that are, in a sense, generic to clauses 38 to 41. I want to receive the right assurances from the Under-Secretary about the lowest common multiple or the highest common factor. I notice that the hon. Lady is wrinkling her eyebrows. I shall explain what I mean.

Several different regimes are coming together, such as local authorities and different Government Departments, in a way that is set out coherently and clearly under the Bill. I am not arguing about that. They will all have different cultures and traditions about information sharing and protocols. Let us consider protection for people on benefits, many of whom will be vulnerable and who should not be put upon through their involvement with the benefit system. Whenever there is a meeting of protocols or doctrines, the solution that is selected must provide the highest possible degree of confidentiality and protection to the citizen, rather than the lowest common factor on which they can all agree. I would therefore like the Minister to say that we now need a regime where safeguards are, if anything, enhanced and there is no weak link in the system.

The next point is that we should ensure that the system is looked at as a whole, in terms of training and the exchange of information about practices—I am not talking about individual cases—between the various participants. Misunderstandings arise when there is a central doctrine and access to central computer system and other people are outside that but may have access to the gateway for specific reasons. It is important that the local authorities talk.

The Under-Secretary will be familiar with the fact, through the Department’s own practice in local benefit payment reviews that are reported to this House, that there is already a dialogue. I am simply saying that, first, we do not want any weak links in the system of protection for the individual in terms of the formal safeguard set out in these clauses. Secondly, we want as far as possible for everybody to adopt a similar and protective approach.

The Under-Secretary will reasonably say that all this is within data protection rules. She will also draw attention to the clause that imposes criminal sanctions on the misapplication of information. I take the view that the criminal law is not something that should be invoked unless there are extreme reasons for it. There are cases where public officials misuse information for malign and corrupt purposes but they are not by any means common or typical. It is far more likely that there is a great deal of over-enthusiasm or cutting of corners under pressure of work, but the law is equally important in protecting the citizen in that.

The criminal law is an important sanction and it should be there. But on top of that is the question of operation in practice. I do not know whether the Under-Secretary has given any thought to this, and I have not rehearsed it with my Front-Bench colleagues, who may take a different view, but it may be useful if someone kept an eye on the process as it works in practice—someone outside the system, outside the Department and outside the payment of benefits.It may be a natural role for the Information Commissioner to look at how it works, to ensure that nobody is abusing the system and that it is not being stretched beyond the purposes that are tied down in these clauses. If we can have those assurances, the Committee will not have wasted its time. These changes should be made and it is equally wrong that they should not be safeguarded.

Anne McGuire (Labour, Stirling)

On a point of order, Mr. Hood. I am seeking your guidance at the moment because there has been some confusion. I am prepared to answer the hon. Gentleman’s point, but I suspect that he is talking about old clause 38, which is now clause 40. I am struggling with what I should do and whether or not you will offer me appropriate advice.

Tim Boswell (Conservative, Daventry)

Further to that point of order, Mr. Hood, I understand. It became clear to me when I picked up the wrong copy of the Bill. There were reasons for that, which I need not go into now but I am indeed talking exactly on those points and I am happy, with your guidance, to receive a response from the Under-Secretary—either now or at the appropriate moment.

Jimmy Hood (Labour, Lanark and Hamilton East)

If it will help hon. Members, we will deal with clause 38 stand part now, and if we want to vote on clause 40 stand part when we get to it, we shall do so.

Anne McGuire (Labour, Stirling)

Thank you, Mr. Hood. The hon. Gentleman does not normally flummox me but he did today and I thought that perhaps this was not the clause that I was about to speak to.

Jimmy Hood (Labour, Lanark and Hamilton East)

I have to apologise to the Under-Secretary. I will now put the question on clause 38 and later she can reply to the stand part debate onclause 40.

New Clause 8

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to move, That the clause be read a Second time.

I endorse many of the comments made by the hon. Member for Daventry and I look forward to hearing the Minister’s response in due course. May I say how much, in my brief time in the House, I have valued the hon. Gentleman’s contribution from the Front Bench? I look forward to that continuing from the Back Benches too.

New clause 8 is designed to elicit a debate and probe in a bit more detail the Government’s thinking about the non-dependent deductions regime for housing benefit and other benefits. The thought behind it, supported by evidence from Shelter and Citizens Advice, among others, is that the current non-dependent deductions regime causes problems for claimants from time to time and significant reform is needed. Reform of the non-dependent deductions regime has been considered before. It may be of interest to Labour Members, some of whom were not around at the time, that when in opposition the Labour party raised a number of concerns about it. In 2000 the Government’s housing Green Paper, “Quality and Choice: a decent home for all” proposed the simplification of non-dependent deductions. Of the 103 organisations and individuals who responded to the consultation paper, only five raised objections.

It may be worth discussing briefly the problemsthat can be caused by the present non-dependent deductions regime. In some circumstances it can lead to rent arrears and consequential hardship, and perhaps even eviction and homelessness. It can also, which is an important point in the overall context of the Bill, create disincentives to work. In my constituency casework I have had experience of the regime causing all those problems, except eviction. Other hon. Members may have broader experience than that.

The idea behind the non-dependent deductions regime is that non-dependants living in a person’s house, such as grown-up children, should make some contribution toward the rent. One might ask who could argue with that. In many cases that would be a fair point, but there are certain categories of claimants for whom the current regime causes problems. The regime has a minimum non-dependent deduction, which at this year’s rate amounts to £7.40. The deduction is banded according to income and the highest rate of non-dependent deduction goes up to £47.75, but where no evidence of the income of the non-dependant is provided, the deduction takes place at the highest rate.

The Department for Work and Pensions has conducted some research on non-dependent deductions and who claims them, but that research is rather out of date as it is 10 years old. Is the Minister happy to agree that further research should be carried out to update the figures? For example, 52 per cent. of claimants for the non-dependent deduction were aged 60 or older and the average age was 58. Clearly, those figures apply to a wide range of categories of people, but mainly—probably—to those with children who have grown up or are growing up, or adult non-dependants, such as spouses or partners.

A problem arises—certainly it did in relation to a constituency case with whom I have dealt—when the non-dependant is a child and the parent is the claimant. Whether or not they are on benefits—my constituent claimant was on other benefits—the parent has to seek from the non-dependant some of the money to make up the difference, if they do not wish to suffer a reduction in living standards or a shortfall in their rent. In that case, if the minimum amount applies, £7.40 would be required from the non-dependant to meet the shortfall. Citizens Advice found that where the non-dependant is a grown-up child under the age of 25, it can be very difficult for parents to get the money to meet that shortfall.

Obviously, I am anxious to hear the Minister’s response to the concern that the rules, which are in place for very good reasons in the vast majority of cases, are, in a minority of cases, causing hardship, can cause rent arrears and might even in extreme circumstances lead to an eviction. That is disruptive for the individuals concerned, and in some cases for families.

My amendment reads:

“The Secretary of State shall make regulations such that the non-dependent deduction...where the non-dependent...is in non-remunerative work, or...has a gross income from remunerative work of under”

a certain amount should be nil, so that if the non-dependant is either living on benefits or has no, or a low, remunerative income, the housing benefit would be payable to the claimant in full. That is an attempt to get around some of the problems. I appreciate that that might not necessarily be a perfect solution, but I wanted to identify in this debate the fact that in some categories of case there are quite serious problemswith the operation of the current rules. I encouragethe Minister to update the Committee on the Government’s latest thinking on that matter.

Let me return to the Government’s response to the Select Committee on Social Security in 1999-2000. The Committee recommended that

“the number of rates of non-dependent deductions is substantially reduced, and that this should be accomplished by abolishing the higher rates of deduction”.

In their response, the Government said:

“The Government acknowledges that the present scheme does increase complexity and that the highest rates of non-dependent deductions may, in some cases, exceed total rent liability. There would of course be costs arising from abolishing the highest two rates....The Housing Green Paper put forward the idea of simplifying non-dependent deductions and the consultation responses will need to be considered before a decision is made about making any changes.”

At that stage the Government’s thinking seemed to betray a degree of awareness of the problems that the current regime can cause in a minority of cases. I would be grateful if the Minister could inform the Committee of whether under the new local housing allowance that issue could be looked at again.

David Ruffley (Conservative, Bury St Edmunds)

Good morning, Mr. Hood. It is a great joy to see you again after such a long break.

I hope, Mr. Hood, that you will not have to witness the scenes that some of us had to witness in the Chamber, not once but twice. At oral questions to the Department for Work and Pensions, there were dangerous signs of a breakdown in the valuable consensus that has been displayed in Committee. Ministers were actually criticising Opposition Members, quite openly and on the record. [Laughter.]

The debate yesterday afternoon started badly and then got worse. I am glad those scenes, which took place during the winding-up speeches, were after the9 pm watershed because children should not have been watching. There were sneering and barracking noises from Government Members in a pathetic attempt to put off my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond). I really hope that we do not see scenes like that in Committee today.

Jimmy Hood (Labour, Lanark and Hamilton East)

I am sure we are getting round to the new clause.

David Ruffley (Conservative, Bury St Edmunds)

I am merely trying to rebuild the consensus and remind hon. Members on both sides of the divide of that. There is still sedentary chuntering from the hon. Member for Glasgow, North-West, but that is part of the great glory of the Committee. All shades of opinion are welcome here under your excellent chairmanship, are they not, Mr Hood?

Let us move on to the business of the clause. This important and probing amendment owes much to the excellent work, campaigning and lobbying done by Shelter and Citizens Advice. For Members of Her Majesty’s loyal Opposition, the amendment is important for two reasons. First, the area of non-dependent deductions is complex and Opposition Members and—I think—Government Members want benefit simplification higher up the agenda, mainly because it will help customers, many of whom are the most vulnerable in society. Secondly, the amendment would streamline Government business and make it more efficient and cost-effective.

The current regulations discourage housing benefit claimants from allowing friends and adult relatives on benefits and low incomes to reside with them. In extreme cases, that may result in eviction, but I do not think there is any great evidence of that, so we are not scaremongering. However, the regulations may well encourage under-occupation of housing units, particularly social housing.

The thrust of the regulations is based on an unassailable proposition that non-dependants with a reasonable income should be expected to contribute to the cost of their housing. No one disputes that. However, the current requirements and rates at which non-dependent deductions are applied can cause hardship either to the non-dependant or the claimant. What concerns us, and I am sure Government Members, too, is the work disincentive effect. Another concern is the possible impact in terms of family breakdown, which is why the modern Conservative party is looking at the area of non-dependent deductions afresh and with renewed interest.

My right hon. Friend the Member for Witney (Mr. Cameron) has, in a modern way—not in a traditional, tub-thumping, right-wing way—talked about the importance of the modern family and about the way in which family units no longer have to have a marriage certificate attached to them. Keeping families together is an important part of any Government’s public policy, and it is a very important part of the benefits system as well. Sometimes the system can keep families together and sometimes it can keep them apart. I suspect that the new clause teases out the problems that some families have in relation to non-dependent family members. Quite often the elder member of the family will be claiming housing benefit, and we can see that there is a disincentive in keeping that non-dependant in the household because of the way that the regime operates.

Jeremy Hunt (Conservative, South West Surrey)

I, too, welcome you back to the Chair, Mr. Hood.

Does my hon. Friend share two of my concerns about non-dependent deductions with respect to work disincentives? First, the statistics are very clear about the greater incidence of child poverty in workless households. In such a non-dependent deductions regime, there is a clear disincentive for someone else living in the household to take work. There is therefore a risk of increasing the number of workless households, which has a direct impact on child poverty.

Does my hon. Friend also share my concern about the possible impact on carers for disabled people? If a carer is living with a disabled person, that carer might also have a strong disincentive to work because of the non-dependent deductions. Does he share those concerns, and does he think that they might be another reason why the new clause should be taken very seriously?

David Ruffley (Conservative, Bury St Edmunds)

I do indeed share my hon. Friend’s concerns about the impact, both in relation to disabled people and on child poverty. I think that I am right in saying that slightly fewer than three out of four children in single parent workless households are in poverty, whereas only one in eight children in single parent working households are in poverty. Ministers would not disagree with those figures. As they have a 2020 child poverty reduction target, I know that they are seeking to tackle those figures and to halve them by 2010. We sign up to those aspirations, but it is certainly the case—

The Minister for Employment and Welfare Reform (Mr. Jim Murphy)indicated dissent.

David Ruffley (Conservative, Bury St Edmunds)

Target or aspiration—whatever. We sign up to those propositions, but to get from where we are now to the 2020 target and to the first milestone at 2010, we must all understand that the decisions made by the Government will have an impact on our ability to meet that target. That is why the new clause is extremely important. My hon. Friend the Member for South-West Surrey makes an excellent point.

My first area of concern is benefit complexity. It contributes to delays and cases of maladministration, but above all—this is the key point for us now—it creates confusion for claimants, many of whom are vulnerable and who will sometimes be in distress. The confusion and uncertainty about how the quite complicated rates and different levels operate can worry the non-dependant, who wishes to stay in a family house or flat, as well as the housing benefit claimant him or herself. That confusion is compounded by the knowledge that failure to provide evidence of a non-dependant’s income will result—without any ifs or buts—in the top rate deduction of £47.75 being applied straight away, which seems quite a harsh principle.

Will the Under-Secretary first explain the rationale for that sanction? I do not think that there is any other word for it. One must remember that individuals might not be able to provide accurate evidence, or any evidence at all, of a non-dependant’s income, for perfectly understandable reasons. In explaining the rationale for why that top rate deduction is applied in such circumstances—where evidence is not fully forthcoming—will she say whether there are any derogations, such as mental illness, which might be just cause for not disclosing that information? If such a good reason is given, could the £47.75 hit be avoided? That is quite an important point.

On complexity, it is worth reading into the record that quite a lot of rates are involved for non-dependent deductions. My second question to the Under-Secretary is why the rates start at the top with £47.75, then descend to £43.50, £38.20, £23.35, £17 and finally £7.40? We understand a deduction regime is needed, but will she explain why there are so many rates?

I hope that the Minister will also fully answer my second question, which was: has she had any discussions with her hon. Friend the Member for Warwick and Leamington (Mr. Plaskitt), the Under-Secretary of State who is responsible for benefit simplification? If she has not discussed with her fellow Minister why there are so many levels of benefit, I ask her to explain why not, because it is an area that is ripe for simplification. We say yes to the principle of deductions, but why are there so many rates?

Tim Boswell (Conservative, Daventry)

My hon. Friend must now get used not only to criticism from in front but occasionally even withering—[Interruption.]

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. Ministers on the Front Bench may need to confer, but if I can hear them they are conferring too loudly.

Tim Boswell (Conservative, Daventry)

I will be brief, Mr. Hood, so as not to excite them. I simply want to say to my hon. Friend that if there are a series of benefit rates there are, by definition, steps, with which he will be familiar from his work in the Treasury. There are important marginal implications when people cross each of those steps and that contributes to the pattern of disincentives, which worry my hon. Friend and me.

David Ruffley (Conservative, Bury St Edmunds)

My hon. Friend makes an important conceptual point, which we come across in the parallel area of tax simplification. There are often very good reasons why tax codes and tax legislation are so detailed: they are protecting the Chancellor of the Exchequer’s revenue base on which we all rely. Were that base not protected we would not have the revenue, the tax pounds, to pay for all the public services. It is always a case of striking a balance. In the case of these benefit levels, my hon. Friend says that there must be no sharp cliff edge in terms of the marginal effect, but it would be useful to understand why there are so many rates for deductions. None the less, I will simplify the question about simplification and ask the Under-Secretary to tell us, without going into the theology of marginal rates and cliff edges, whether she has had any discussions on the issue with her hon. Friend the Member for Warwick and Leamington?

My third question for the hon. Lady is on a matter that puzzles me. It is a “techy” point, which is also made by Shelter and Citizens Advice, but we should have a reply to it. Under-25s who are in receipt of income support or income-based JSA are exempt from NDDs, but those in the same age group claiming contribution-based JSA, paid at the same rate, are not. My simple question for the hon. Lady is: why?

Income support and JSA claimants, both income and contribution-based, aged over 25, attract an NDD of £7.40 a week, which is the lowest deduction, but that means that NDDs can still push people below minimum income levels and into poverty. Those benefit claimants are expected to contribute towards the rent from their benefits when they would not be required to do so if they held their own tenancy, which prompts another important question for the hon. Lady. There is a perverse incentive in that people might be better off if they found their own tenancy and made their own housing benefit claim at a far greater cost to the taxpayer, rather than not finding their own tenancy, not claiming a large slug of housing benefit and instead lodging or taking a room in a family home or with a friend or relative. Have the hon. Lady and her Department done any research on that question?

Should we not encourage better and more efficient use of our housing stock? Would not an answer to that question help to tease out what is going on? Is it the Government’s policy to encourage greater occupation or to drive people into finding their own tenancies at inconvenience to them—they might not want the responsibility of their own household unit—not to mention the extra cost to the taxpayer of a new housing benefit claim for a brand new tenancy?

The spokesman for the Liberal Democrats referred to the age of the last DWP research on NDDs. I shall not say that it was done when dinosaurs stalked the earth, but it was 10 years ago, and that is a long time in governmental terms. I do not have the advice of numerous brilliant civil servants, advisers and speechwriters that Ministers have; I have only my basic research, which says that the most recent DSS and DWP research into NDDs is the 1996 DSS research report No. 43, “Paying for Rented Housing”. How long it seems since that report, and the days when the Major Administration was constructing its golden economic legacy, a legacy from which the Labour Government benefits in no uncertain way.

For the record, that research, albeit 10 years old, found that 52 per cent. of claimants of an NDD were aged 60 or over—that is a high figure; more than half—that the average age of all claimants was 58, and that 48 per cent. of claimants survived on income support. Touching on the point about which my hon. Friend the Member for Daventry speaks with such authority, 11 per cent. were sick or disabled—the study said parenthetically that that was believed to be an underestimate—and 71 per cent. were either aged over 60 or disabled, lone parents or on unemployment benefits. The 1996 study also looked at the profile of non-dependants and found that the average age of non-dependent children of claimants was 28 and that of brothers or sisters was 55.

Those figures illustrate the fact that NDDs are more likely to affect the elderly and people who are in receipt of other benefits. The departmental data are supplemented by troubling data from Shelter and Citizens Advice. Their advice centres find evidence of family formation being undermined. They report that the application of NDDs to JSA and income support claimants causes problems for the housing benefit claimant in two ways. First, housing benefit claimants with adult children often find it difficult to recover the expected contribution from those children, leaving them with no choice but to ask the children to leave or to meet the shortfall from their own incomes. We can imagine that that can lead to difficulties in families. The second problem that the advice centres have discovered is that claimants might allow a friend, rather than a relative, to stay but find out later—when the friend has moved on—that they have been overpaid and anNDD has been applied retrospectively. In those circumstances, the housing benefit department will attempt to claw back the overpayment. It can be difficult for the host to recover a large sum from the friend who was staying if he is receiving only the low income that benefits provide.

Tim Boswell (Conservative, Daventry)

In the spirit of the exchanges at DWP questions yesterday, does my hon. Friend agree that if it is difficult for the Department, with its debt recovery organisation, to make much inroad into overpayments centrally, it is particularly difficult under the present rubric for a council housing benefit department to recover overpaid benefits in a world in which people move on and change location?

David Ruffley (Conservative, Bury St Edmunds)

My hon. Friend makes an excellent point, to which the Under-Secretary might like to respond. Overpayments like those often result in rent arrears, with the possibility of eviction for tenants. That is not desirable.

I should like to make a short excursion into recent history and remind the Under-Secretary that, when in opposition, the Labour party raised concerns about the non-dependent deduction regime, and later did more than that. When it got into Government, the Labour party considered the matter quite purposefully, by all accounts. In 2000, the housing Green Paper, “Quality and Choice: a decent home for all”, proposed the simplification of NDDs, and 103 of the individuals and organisations that responded to the consultation paper supported their simplification or reform. Five respondents apparently disagreed with simplification.

In the 1999-2000 Session, the Select Committee on Social Security held an inquiry into housing benefit and recommended that the number of rates of non-dependent deductions should be substantially reduced, and that that reduction should be accompanied by abolishing the higher rates of deduction—which refers back to a point I mentioned earlier. In its response to that Committee recommendation, the then Department of Social Security stated:

“The Government acknowledges that the present scheme does increase complexity and that the highest rates of non-dependant deductions may in some cases exceed total rent liability. There would, of course, be costs arising from abolishing the highest two rates. The Housing Green Paper put forward the idea of simplifying non dependant deductions and the consultation responses will need to be considered before a decision is made about making any changes.”

To repeat the point, in spite of what seemed overwhelming support from the respondents to the consultation, in December 2000, Ministers announced that they were not taking forward options to simplify NDDs. To ask a simple question, in the spirit of honest inquiry, about something that happened before the Under-Secretary’s time in the Department: why? A lot of valuable work was done by her predecessors after the 1997 election and many important noises were made, particularly on benefit simplification. This was not my bedtime reading in 1999 and 2000, so I come into this area with a relatively fresh mind—well, certainly a mind; I am getting on in years, so I am less fresh than I used to be—and I am puzzled by the basis for the policy decision by the Department not to proceed with what look like sensible benefit simplification measures. I should have thought that such measures would have benefited those operating and administering the system and, most importantly, the customers on the receiving end—those requiring the help that they clearly deserve.

Shelter and Citizen’s Advice, which have done a lot of work on this matter, have helpfully sketched out three main runners as options for reform, which I shall place on the record. We know that each one has a price tag, so I do not want the Under-Secretary to say that this is a spending commitment from Shelter, Citizens Advice, the Liberals or the Conservative Opposition; they are options offered in the spirit of genuine inquiry. Putting aside the price tags, could she tell the Committee whether any or all of the three propositions are being considered with a view to simplifying and improving this area of the benefits system?

The first proposition is that no NDDs should apply for non-dependants in receipt of income support or jobseeker’s allowance. Currently, only under-25s receiving those benefits are exempt. Has the Under-Secretary considered that? If she has done so and rejected it, that is fine, but it would be useful to know for the future whether we are barking up the wrong tree. According to a written answer of 27 February this year, the DWP estimates that such a change would cost £22 million per year.

The second proposition is that total NDDs should be capped at 50 per cent. of the rent. Currently, some claimants with more than one non-dependant living at home have more than 50 per cent. of their benefit deducted. The DWP estimate of the price tag for that is £37 million a year. I stress, however, that I do not wish the Under-Secretary to get hung up on price tags at this stage; we are just discussing the principles.

Thirdly and finally is the proposition from Shelter and from Citizens Advice that the two highest rates of non-dependent deduction—those at £47.75 and £43.50—should be abolished. That proposition was prefigured in the musings of the Under-Secretary’s ministerial predecessors at the turn of the millennium. According to DWP estimates that would incur a cost of £10 million a year.

I thus conclude my peregrinations around NDDs. I hope that the Under-Secretary will answer some of our questions, which were asked in a spirit of honest inquiry and probing and have excited the attention and interest in particular of Citizens Advice and Shelter, to whom I am greatly indebted for their briefing and informative advice.

Anne McGuire (Labour, Stirling)

I did not realise how much I had missed the hon. Gentleman, and the magic word “parenthesis”. I am fascinated by his wish to put aside the price tags for the matters to which he refers. That makes us utterly confused sometimes.

Kali Mountford (Labour, Colne Valley)

Suspicious.

Anne McGuire (Labour, Stirling)

Suspicious, as my hon. Friend says. We are not sure whether the Opposition are raising a concern, making a commitment or just chuntering on in the way that the hon. Gentleman accused my hon. Friend the Member for Glasgow, North-West of doing. I am not at all surprised that they want to put aside the price tag for anything, given the devastating performance yesterday of the Chancellor of the Exchequer, when he pulled apart the spending commitments that the Opposition have already made.

With that little frisson of excitement by way of introduction, I shall—

Jeremy Hunt (Conservative, South West Surrey)

Proceed more gently.

Anne McGuire (Labour, Stirling)

Proceed more gently. That is right.

The debate has been interesting, and we have had discussions around a subject that I know causes great concern to some. I hope, however, that I can persuade the Committee that the Government are on the right track. By way of preamble, as opposed to peroration, let me say that we have considered the points made by the various organisations. However, I stress that we are dealing with adults in households, because an underlying impression seems to have been created that we are concerned with dependent children. We are not.

As far as the Minister for Employment and Welfare Reform and I can see, there is no impact on child poverty in relation to the proposals. I appreciate that the eradication of child poverty, as opposed to the creation of it, is the new commitment of the Conservative party, but in our honest opinion there is no impact on our eradication policy, nor on our strong commitment to that policy. The point is whether adults in a household can rightly be considered to make a contribution to the household income.

Jeremy Hunt (Conservative, South West Surrey)

Can the Under-Secretary clarify something that I might not have understood about non-dependent deductions? Suppose a non-dependant is living in a household with someone who is claiming housing benefit, and they have a child. The concern about child poverty is that the non-dependent deductions might discourage the other person from seeking work and therefore increase the number of workless households. Can she clarify that?

Anne McGuire (Labour, Stirling)

I know there has been a bit of a break since the earlier part of our consideration of the Bill, but its general thrust has been about supporting people into work. To deal with some issues that have rightly been raised on child poverty, I do not accept the hon. Gentleman’s primus that somehow that will impact on our policy of eradicating child poverty. We must recognise that we are saying to adults within a household where there is income that there is a responsibility to contribute to the general household income.

I appreciate all the difficulties raised, in that sometimes it can be difficult to get an adult child—we are talking here about people over the age of 25—to make that contribution, yet I dare say that when some of us went out to work and got our first pay packet, the first thing that happened was a parent insisting that we make a contribution to the household. That may not have been a great deal of money, but it was recognition that we were inside a family community where a contribution had to be made. That is a very good principle—a good socialist principle, I dare say.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the Under-Secretary for giving way when we have just heardthe word “socialist” spoken by someone on the Government Benches—something we have not heard in some years. It may be a response to the new, modern Conservative party.

David Ruffley (Conservative, Bury St Edmunds)

Will the hon. Gentleman give way?

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am not sure that I can when I am making an intervention. [Interruption.]

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. I am hearing a cross-conversation here.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

Thank you, Mr. Hood. The Under-Secretary made the point that we are talking about only people over 25 here, but we are not because for some reason—perhaps she can clarify this—under-25s in receipt of contribution-based jobseeker’s allowance have non-dependent deductions applied to them. It would be useful if she explained that.

Anne McGuire (Labour, Stirling)

I probably stand corrected on that point, and I will come back to it. I want to deal with some of the real issues raised in the debate, and I hope to assuage some of the fears that have been highlighted. As I said in my opening comments, we think it is right that if someone is living in someone else’s house, they should contribute to the housing costs. I draw the parallel that people on income support who are home owners have to manage all their financial outgoings, including bills and so on. Why, then, is it being said that if someone lives in the household, as described here today, they should not contribute to meeting those costs? We think that asking that question is consistent with our rights and responsibilities agenda.

I repeat that we are talking about adults here. I do not want our discussion to be muddied by any possible appearance, which I appreciate may have been unintentional, that we are talking about children. If the non-dependent person is on income support, or on income-based JSA, and under 25, no deduction is taken into account for that individual.

Jeremy Hunt (Conservative, South West Surrey)

The last time that I made repeated interventions, the Under-Secretary said that I was trying her patience. Obviously, in our new consensual spirit, I would not wish that to happen, but I would still like a little clarification. Given that one working-age disabled person in three has children, if such a person were claiming housing benefit and had a partner living with them, who could cause a non-dependent deduction to be made? Does she not agree that, in that situation, there is a concern that the non-dependent deduction acts as a disincentive to that partner working? That could therefore indirectly increase the number of workless households. That is our concern and why we are pressing her on child poverty.

Anne McGuire (Labour, Stirling)

The hon. Gentleman is not trying my patience this morning. He has made a reasonable intervention, but with the greatest respect it is oftenthe case that if one element is taken out of a whole approach, a conclusion can be drawn about disincentives. I ask him to look at not only the housing benefit regime, but all the other elements—not only the Bill, but the tax credit system and so on.

I could go through the whole gamut of our policies, which support people going into work and sustain them in work. If the hon. Gentleman looked at all those measures, he would perhaps get a more realistic picture of what we are doing to support people in that respect.

I return to the point I made earlier, which is that the Minister for Employment and Welfare Reform and I think that drawing the issue of child poverty across this debate is not particularly helpful. It is not relevant, and if I was in a more tetchy mood I would say that it is a red herring.

Jeremy Hunt (Conservative, South West Surrey)

Will the Under-Secretary please give way?

Anne McGuire (Labour, Stirling)

No, I am going to deal with some other points. Forgive me, but I cannot remember which Member raised the issue of carer’s allowance; it might have been the hon. Gentleman. If the carer is a member of the household—the unit of assessment—the carer’s allowance will be taken into account, but the claimant of the housing benefit will receive a carer’s premium as part of their housing benefit claim. That is what I mean when I say that we cannot look at just one part of the system—there is a holistic approach to support. I appreciate that sometimes it may appear to be fragmented, but it brings together a whole range of support in terms of the household income. There is a carer’s premium within household benefit, which deals with some of the issues raised on carer’s allowance. I hope that that has attended to the issue of disabled people with carers.

The hon. Members for Inverness, Nairn, Badenoch and Strathspey and for Bury St. Edmunds asked about a simpler scheme with fewer deductions. We must recognise that one person’s bureaucracy can be another’s sensitivity. We must recognise that. Quite fairly, in highlighting the issue in the Green Paper pre-millennium and looking at the development of our policy post-millennium, we recognised that if we reduced the number of bands, the system would be less sensitive to individual circumstances. We feared that if fewer deductions were imposed over a given income range, which I believe is the thrust of the new clause, that would create winners and losers. Our assessment is that life would be made worse in terms of housing benefit support because the bands would be wider, so any change in the rate of reduction would be greater than the change in income.

So, in trying to deal with a simplification issue—as an aside, Ministers in the Department constantly talk about simplification because it is one of our priorities—we feel that, in this case, if we compressed the bands in terms of numbers but extended the range, there would be more losers than winners. That would be to the disadvantage of the individual. It is often difficult to be sensitive in an enormous system such as housing benefit or the benefits system in general, but we try to differentiate and to pick up some sensitivities.

That is why—this goes back to the comments made by the hon. Member for Bury St. Edmunds—many of our benefits have a range within them. Disability living allowance has higher, medium and lower; carer’s allowance and JSA also have a range. All the way through our benefits system, we try to recognise that not everybody needs the same support and that people need to be assisted in a slightly different way financially than could be managed if we went for an approach of total simplification.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

The Under-Secretary is making an important point about the need for the benefits system to be sensitive and finely tuned to the range of concerns that might be present in a particular benefit. However, in this case, the new clause suggests a zero rating for the non-dependent deduction for people who have no remunerative income. That could be seen to increase the sensitivity of the benefit system. If the non-dependent person had a low or zero income, applying the deduction could cause greater hardship and so could be seen to be more, rather than less, insensitive.

Anne McGuire (Labour, Stirling)

I shall come back to that when I try to pull all the points together.

Tim Boswell (Conservative, Daventry)

Is it not the logic of the Under-Secretary’s argument—although we do not always have to follow logic to its ultimate conclusion—that one should not have bands at all and that the deduction should simply be income related on the basis of a sliding scale?

Anne McGuire (Labour, Stirling)

The hon. Gentleman, as usual, has put his finger on the pulse of the issue. I am sure that my hon. Friend the Minister for Employment and Welfare Reform will say something to him, on behalf of both of us, when we reach clause 48, but I do not want to take up the Committee’s time just now.

As I was saying, I shall come back to the previous point when I try to pull all this together. The hon. Member for Inverness, Nairn, Badenoch and Strathspey asked whether we have any plans to reform non-dependent deductions. It is fair to say—I hope the Committee recognises this—that we have looked constantly at how we keep under review the provisions of the benefits system. We intend to amend the provisions for the local housing allowance where a person could be a non-dependant of more than one occupier. Instead of the existing process, which is probably unnecessarily bureaucratic, where the deductions are portioned between a number of occupiers if somebody is moving between two or three households, the whole deduction will be made only in the calculation of the first occupier who notifies the local authority.

I hope that I have dealt with the issue of simpler schemes with fewer deductions. That links in with a point raised by the hon. Member for Bury St. Edmunds on the simplification of non-dependent deductions. From October 2003, if the householder or their partner is aged 65 or over and a non-dependant moves in to their home, or existing non-dependant circumstances change and increase the deduction, we have not started the deduction or the increase until 26 weeks have passed. We take into account, for example, short-term visits to mum, dad or friends.

There is another important issue. I am sorry that the hon. Gentleman has had to leave us for a few minutes, because it links into the issue that he raised about older people and those receiving pensions. If the non-dependant is on pension credit, no deduction is made.

I shall deal with a point raised by the hon. Gentleman on the non-dependent deductions and income support, and why the measure kicks in at the age of 25. As has been highlighted, we do not implement any deduction for claimants between the ages of 18 and 24 who are in receipt of income support or income-based jobseeker’s allowance. After the age of 25, only the minimum deduction is applicable, which reasonably reflects the levels of benefit for those in that age range.

That reflects the fact that allowances for those on benefits rise at the age of 25 by £11.95 a week. Returning to our responsibility agenda, it is reasonable to expect that someone over the age of 25 who is in receipt of an income, albeit through income support or jobseeker’s allowance, should make a contribution to the household in which they live.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

It is important to flesh out the point about under-25s. Can the Under-Secretary explain why NDDs should be applied to under-25s on contribution-based JSA but not those on income-based JSA? Does that not throw up a potential anomaly for an individual who is entitled to either income-related or contribution-based JSA? He will choose the higher amount, and if that is contribution-based JSA and he then has an NDD applied, his allowance might be reduced to below the level of the income-related JSA to which he would otherwise have been entitled. Having elected to take contribution-based benefits, the individual might receive less benefit overall because the NDD has been applied to him.

That is also the case for somebody who is not in receipt of benefit or has had his benefit sanctioned. If an under-25 has lost his JSA owing to a benefit sanction and is a non-dependant, although there is no NDD while he is in receipt of benefit, the effect of his benefit’s being sanctioned is that the person on whom he is dependent also has his benefit sanctioned, so a double sanction is going on. From the point of view of the person on whom the under-25 is dependent, that is a particularly negative situation.

Anne McGuire (Labour, Stirling)

There were so many negatives and double negatives in the hon. Gentleman’s question that I can only hope to give him a definitive answer. However, if I cannot do so, I shall deal with that specific example in writing. I do not usually like to do things that way, but this is a complicated matter and I should not want either of us inadvertently to create an incorrect impression.

As I suggested to the hon. Member for BurySt. Edmunds, when he talked about whether the income of senior citizens and those who had had a short-term stay in another person’s house would be taken into account, the test for the non-dependant is whether his normal residence is with the claimant. If it is not, no deduction is made.

On capping, I have to say to the hon. Member for Inverness, Nairn, Badenoch and Strathspey that if we went for a capping regime, it would cost some£37 million per year. That harks back to the point that every person in a household should make a contribution to its income, and deductions are made accordingly. I hope that I have answered most of the points that have been made. If I have missed any, or if I need to clarify a point of detail, I shall deal with them.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey asked about non-remunerative work. What we mean by that is somebody working for less than 16 hours a week. I do not know whether that will help him to understand why we have used that term. If a person works more than that, the normal situation will apply.

We have had a fascinating debate, and some genuine issues have been raised. It is important to remember that the Government have frozen the deduction rates since 2000, although the income band widths that determine the rate of deduction have been increased each year. For six years, there has been no increase in the deduction level, although we have expanded the bands. That has been beneficial both to householders and to non-dependant individuals.

I respectfully suggest to the hon. Gentleman that the new clause would break with the general principles that I have outlined. In other words, it is expected that a person who is a member of a household will make a contribution to that household’s running costs. In addition, if the new clause were accepted, some people who at present attract a deduction would not do so. I am not sure whether the hon. Gentleman recognises that. Those two groups would be those in non-remunerative work—those working less than 16 hours a week—and those in remunerative work whose income is less than £101 a week. Members of both groups currently attract a £7.40 per week deduction from the tenant’s housing benefit and a £2.30 reduction from council tax benefit.

It is not clear from the new clause what the intention is regarding non-dependants who are in non-remunerative work and who are in receipt of income support or income-based jobseeker’s allowance. I have assumed that the hon. Gentleman intends that no deduction should apply for anyone in non-remunerative work. With the greatest respect, I suggest that that is rather odd because the new clause would mean that a non-dependant who was on income support and was not working would continue to attract a deduction, but a non-dependant who was on income support and doing some part-time work would not attract a deduction. There is an inherent contradiction in the new clause, unless it is just a typical Liberal Democrat attempt to play both ends off against the middle.

Although the lower rate of deduction in council tax benefit applies to incomes of less than £157 a week, if the intention is to split the current lower income band in two with the dividing line at £101 it would mean that the current lower rate of deduction would apply to weekly incomes between £101 and £157. If the intention is to move the current band threshold from £157 to £101, it would mean that around 10,000 non-dependants with incomes between £101 and£157 would attract increased deductions, up from£2.30 to £4.60 per week. I am not sure whether the hon. Gentleman has appreciated that. Taking all of those factors into account, the cost of the new clause would be £45 million a year. Although I like the idea of ignoring the price tag, in some circumstances we have to look at it.

The Secretary of State already has broad powers in relation to non-dependent deductions. Using primary legislation to set the lower rate would mean that flexibility to review the rate each year would be lost. As people’s incomes increased, as they must under the national minimum wage, more people would attract a deduction. The non-dependent deduction scheme is dealt with through regulations and the Government continue to believe that that is the right place for it.

We have had a fairly lengthy and somewhat detailed discussion of the clause. I hope that I have managed to address most of the points raised. We will certainly scrutinise the contributions of hon. Members. If there is anything I have missed that needs to be clarified I will write to them.

David Ruffley (Conservative, Bury St Edmunds)

May I raise two points quickly? The first is about something that puzzles me. Under-25s on income support or income-based JSA are exempt from NDDs, but those of the same age group claiming contribution-based JSA are not. It happens with other benefits too. Why is there this separation for those in the younger age group, in this case the under-25 demographic, between income-based JSA and contribution-based JSA?

My second question is one that the Minister will not be embarrassed to answer because there is no price tag attached, although technically there is one. When will more research on this important area be commissioned by her Department? Is it intended to refresh and renew the research work done in 1996, particularly in view of the disincentives to keep a family together caused by the current regime? The present regime might lead to a perverse incentive for a non-dependent to leave shared accommodation in which they may be lodging or living and applying for their own tenancy, thus putting pressure on housing stock and the Exchequer by giving rise to a brand new housing benefit claim. There is anecdotal evidence that that could be a problem, and any Minister would want to deal with it. Will more research be done? Has any research been done on that? It does not seem to do anyone any good if the current regime is forcing people out of their homes and leading to further householder unit formation, with people having to find their own housing and claiming more housing benefit in their own right.

I shall finish, having asked a grand strategic question about research and made a technical query about the distinction between income-based and contribution-based JSA.

Anne McGuire (Labour, Stirling)

I hope that I can tell the hon. Gentleman why the two regimes are different. First, however, I should like to say that we keep our research under review and I would not be surprised if we were considering how to refresh—as the hon. Gentleman said—our research in this field. That is within the Department’s research priorities, into which Ministers may have some input.

On housing break-up because of a deduction, we have to be clear that when a person moves into their own household, the £7.40 deduction is not the only factor—there are many elements that someone needs to take into account in moving. I appreciate what the hon. Gentleman said, but he did say fairly that the evidence was anecdotal. Obviously, however, we will keep an eye on that. As I said to the hon. Member for Daventry, we have to recognise that, if we look at things in isolation, an incorrect conclusion can be drawn because it is based on only one piece of logic, if not evidence.

On the contributory and non-contributory elements of JSA, if the benefit is income-related, we recognise that the individual’s income and capital is low, so there is an element built into JSA that takes account of individuals’ financial circumstances. However, a person can be on contribution-based JSA and not need any additional income support, because they are entitled. If any Committee member needed to do so, they could sign on for JSA as an entitlement because of their contribution record. There are two different circumstances that reflect the fact that within our large social security system there are different ways of supporting people at various points in their lives and in the light of individual circumstances. The new clause opens up a discussion about that sensitivity; nevertheless, I ask the hon. Member for Inverness, Nairn, Badenoch and Strathspey to reconsider and to ask leave to withdraw the motion.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the Under-Secretary for that clarification, although I should be grateful if she wrote to Committee members about the regime for under-25s, not least about circumstances where someone might be entitled to both income-based and contributory jobseeker’s allowance.

In her earlier remarks, the Under-Secretary mentioned a particular change that the Government are seeking to make to the non-dependent deduction regime relating to circumstances in which there is more than one householder and one non-dependant, and the way in which the non-dependant deduction is shared between those people. Members of the Committee may wish to reflect further on that point. One possible risk is that it provides an incentive for one householder to wait on the other to notify the Department. There are swings and roundabouts in all these things.

I echo what the hon. Member for Bury St. Edmunds said about research. The Minister said, slightly bashfully perhaps, that Ministers had some influence on the Department’s research programme. I hope that Ministers’ influence on that programme is considerable when they feel that a particular area is ripe for further research.

We have had a good debate, which has highlighted the fact that the NDD regime is ripe for additional research, none having been conducted during the Labour Government’s term of office. The last research took place under the Conservative Government, and Ministers may therefore want to have a fresh look at it.

I share the hon. Gentleman’s concerns about household break-up. I appreciate that many factors are involved, as the Minister said, but that could be usefully addressed in further research by the Department. I hope that it will also be taken into account in designing the Department’s future research programme, with due ministerial influence.

Anne McGuire (Labour, Stirling)

Just to clarify the position, as Hansard may show, I appreciate that I said “some” influence; I meant, of course, that we have great influence on the Department for Work and Pensions’ research priorities.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the Minister for that intervention. I hope that she will use her great influence to ensure that further research on the matter is conducted.

The Minister made some important criticisms of the amendment. As I said when opening the debate, it was designed to probe the Government’s thinking and I hope that some of the issues that have raised in the debate will be taken further in another place. With that in mind, I beg to ask leave to withdraw the motion.

New Clause 9

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to move that the clause be read a Second time.

The new clause may be slightly technical but it makes an important point. It would amend ground 8 set out schedule 2 to the Housing Act 1988, with which members of the Committee will be familiar. Private landlords and housing associations can use ground 8 to seek possession of accommodation let on an assured tenancy when a tenant has arrears of more than two months’ rent. Unlike other rent arrears grounds for possession, ground 8 is mandatory: the court has no discretion to decide whether it is reasonable to make an order for possession.

The proposed amendment to ground 8 in the new clause is designed to give the courts discretion in cases where housing benefit issues are outstanding—for example, the court can decide to adjourn the case or to suspend an order for possession. I believe that that will help to ensure that tenants are not evicted from their homes due to non-payment, or delay in payment, of housing benefits.

The Minister will be aware of the present position on delays in housing benefit decisions and the problems that can sometimes cause. The average time taken to process a new claim for housing benefit in 2004-05 was 36 days and the worst-performing authorities took approximately 117 days to process a new claim. I know that those are 2004-05 figures and that the Government have been trying to improve them. In fairness, it is worth noting that one of the benefits of the local housing allowance pilot areas has been the speeding up of administration and the processing of claims. Having said that, if one looks at the different pilot areas, one can see that there is quite a degree of variety in the times taken to process and administer claims.

Certainly, the worst-case scenario of it taking 117 days to process a new claim takes us well beyond the two months’ arrears which currently allows possession to be sought under ground 8. Faced with such an application, the courts would have no choice, even if there was an outstanding housing benefit claim and all the evidence suggested that once that claim was processed, it would result in an award being granted. The way in which ground 8 is framed gives a court no option but to enforce possession. It important to say that under ground 8, a court has no discretion to refuse an order, whatever the reason for the arrears. It is unable even to adjourn the case. Ground 8 is open to private landlords and housing associations that use assured and assured shorthold tenancies but not to local authorities.

The inclusion of ground 8 in the 1998 Act was originally designed to stimulate the private rented sector and to make it easier for private landlords to recover their property. However, since 1993, private landlords have been able to gain possession of shorthold tenancies quickly and without a hearing under section 21 of the 1988 Act. I am sure that the Under-Secretary will be aware of the 2004 case of North British Housing Association v. Matthews, which explored in some detail the problems relating to ground 8, but I shall refresh the Committee’s memory on the point because the case starkly illustrated the problems caused by ground 8.

The housing association brought possession proceedings under ground 8 despite being aware that the tenant had an outstanding housing benefit claim. A county court judge decided that he had no choice but to grant an outright possession order. However,Ms Matthews subsequently received a backdated payment of housing benefit, which completely cleared her arrears and, what is more, put her rent account into credit. The Court of Appeal heard that where ground 8 is involved, the county court had no power even to adjourn the hearing for a short period to await a housing benefit payment. The Court of Appeal was troubled by that situation. Lord Justice Dyson concluded:

“It is a sad feature of contemporary life that housing benefit problems are widespread. To a substantial extent these are no doubt the product of lack of resources. But we do not consider that the non-receipt of housing benefit can, of itself, amount to exceptional circumstances which would justify the exercise of the power to adjourn so as to enable the tenant to defeat the claim. We acknowledge that this conclusion will lead to tenants who are in receipt of housing benefit having no defence to a claim for possession in circumstances where they are not at fault. The statutory scheme is, therefore, potentially draconian in its application.”

That is fair comment on the current powers.

The Under-Secretary, who is, like me, a Member for a Scottish constituency, will be aware that the Scottish Parliament and the Scottish Executive have already introduced measures to prevent the eviction of tenants with rent arrears caused by housing benefit problems. Section 12 of the Homelessness etc. (Scotland) Act 2003 amended ground 8 in almost precisely the same way as is proposed in new clause 9. However, section 12 goes further, requiring the court to have regard to non-payment or delay of housing benefit in deciding whether it is reasonable to make an order for possession under other rent arrear grounds.

The new clause may be technical in nature, but it has important implications. I am sure that everyone in the Committee who is concerned about social justice wants to make sure that where there are administrative problems with housing benefit, they do not leave the court with no choice but to order possession. I therefore hope that the Under-Secretary will accept the new clause, or make it clear that the matter is something on which the Government will table amendments in due course.

I am grateful to Shelter and Citizens Advice for their comprehensive briefing and background information on this important matter, and I look forward the Under-Secretary’s response.

Anne McGuire (Labour, Stirling)

I am pleased that the hon. Gentleman has raised these issues. The new clause may be technical but as he indicated, ground 8 can have a serious impact on the life of an individual. It is not used extensively, but he is right to point out that it is in the law and has the potential to be used. I am aware of the case that he highlighted.

The figure of 36 days that the hon. Gentleman mentioned is correct, but we are not sure where the 117-day figure came from. In 2004, the bottom 15 per cent. of authorities took an average of 74 days for processing. We suspect that the figure may have come from the London borough of Hackney, where the local authority took an average of 117 days to process new housing benefit and council tax benefit claims in 2004. That improved to 55 days in 2005-06, and Hackney is now processing claims within 30 days on average. I had the pleasure of visiting Hackney recently and I know that it has invested a great deal of effort in managing the front-of-house and back-of-house operations to ensure that people get the benefits to which they are entitled.

Members of the Committee may be interested to know how their own local authorities have improved their processing. Slough, which I think is the local authority of the hon. Member for Windsor, took an average of 67 days to process new claims in 2004; that figure is now down to 33 days. The Highland council was taking 53 days to handle new claims, which was within the average, but that has now decreased to33 days. South Northamptonshire has gone from 97 days in 2004 to 26 days, which is a tremendous achievement. Caerphilly’s average processing time was 46 days in 2004 and is now 34 days. Waverley, which I understand is the authority of the hon. Member for South-West Surrey, had an average of 81 days, which is now down to 46. Kirklees council, of which we have heard a fair bit in the Committee, has reduced its average time from 49 days in 2004 to 30 days. The star prize goes to Mid-Suffolk, the council of the hon. Member for Bury St. Edmunds, whose average in 2004 was not so fine, at 90 days; that is now down to 32 days. I do not know whether the hon. Gentleman’s interest in housing benefit, which is newly found, as he admitted this morning, has prompted his local authority to improve so dramatically.

We can see that local authorities recognise that they need to deal with the claims quickly. They are working very closely with our Department and sharing experience and good practice.

Tim Boswell (Conservative, Daventry)

It is genuinely useful for the Committee to hear about some of that experience. The hon. Lady is entirely on the right lines to suggest that the answer to the problem is to encourage local authorities to get on with the job. Although it is now deeply unfashionable on the Opposition Benches to speak up for landlords, I make the point on their behalf that it is clearly unsatisfactory if they cannot get service of rent. If we were to go along the lines of the new clause tabled by the hon. Member for Inverness, Nairn, Badenoch and Strathspey, it would be equally important to ensure that landlords were not disadvantaged. The answer is to get to the root of the problem, whatever we may want to do about the legal shape or form of the sanctions.

Anne McGuire (Labour, Stirling)

I am sympathetic to the points that have been raised by both the hon. Gentleman and the hon. Member for Inverness, Nairn, Badenoch and Strathspey, who tabled the new clause. In practice, very few landlords use the ground 8 provision to secure possession. It is fair to say that they, too, are generally sensitive to the financial difficulties that their tenants may face, particularly in relation to delays, which should not happen but sometimes do. Most landlords use the no-fault powers in section 21 of the Housing Act 1988, which allow the landlord to obtain possession of a property without going to court, by giving two months’ notice at the end of a fixed term of tenancy, or after six months of a periodic tenancy.

Kali Mountford (Labour, Colne Valley)

I am exceptionally grateful to my hon. Friend for meeting members of CHAS from Kirklees, whom she kindly mentioned in her opening remarks. Does she recall that, at that meeting, we noted that some people are hidden among those figures? There are still some exceptional cases. Are the Lord Chancellor’s Department and the Cabinet Office still looking at possible remedies to that problem?

Anne McGuire (Labour, Stirling)

Not only is my hon. Friend a wonderful MP and a tremendous member of this Committee, but she has just added to her talents, because she can read minds. I was just about to come on the point about the Department for Constitutional Affairs to which she drew the attention of the Committee.

The pre-action protocol for possession claims on rent arrears, which was recently published, as myhon. Friend suggested, by the Department for Constitutional Affairs, applies to social landlords who applied for possession due to rent arrears and includes current good practice in managing rent arrears. It clearly recognises that it is preferable to resolve problems, including those related to housing benefit administration, without resorting to court proceedings.

The Law Commission produced earlier this year a final report on renting homes, which follows the tenancy review and pertains specifically to the new clause that the hon. Member for Inverness, Nairn, Badenoch and Strathspey tabled. There are many proposals in the report, including the possible abolition of ground 8 for certain tenancies. I am sure that the hon. Gentleman will appreciate that the issue concerns a change to tenure law, rather than to social security law, and that the Bill concerns social security law. In that respect, could I also refer to the situation in Scotland? He is quite right to indicate that there has been a change of policy in Scotland, but again, I emphasise that that is a matter of tenure law and not homelessness or social security legislation.

I understand, however, that the Department for Communities and Local Government is generally supportive of the Law Commission’s proposals. Although it is not yet in a position to comment on how the Commission’s proposals may be taken forward within its wider programme of work, I understand that my colleagues in that Department are looking at opportunities to make legislation at some point in the future. They are therefore keen to hear representations from the stakeholders on all the Law Commission’s recommendations.

Yes, we are sympathetic to the points made by the hon. Gentleman; we recognise that this mandatory ground does not leave any room for flexibility. It has been criticised by judges, as well as by organisations such as Shelter, but this is not the appropriate vehicle for doing that. I hope that he will accept the assurance that colleagues in the Department for Communities and Local Government are looking at the issue. With that, I ask him to withdraw his motion.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the Minister for that very positive response, and I trust that she will draw this short debate to the attention of her colleagues in the relevant Departments who are considering the matter. I beg to ask leave to withdraw the motion.

New Clause 10

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to move, That the clause be read a Second time.

The intention of the new clause is clear: it would remove the requirement for the claimant to have physically moved into the new home and become liable for rent on two homes. It is to cover the situation in which someone who is entitled to housing benefit on one home is moving to another home where they are also entitled to housing benefit. It would allow the period of four weeks to be extended where applicants are awaiting the outcome of an application for a social fund payment to meet the need arising from the move or in connection with setting up home in a new dwelling.

I am grateful again to Shelter for briefing and information in support of the new clause. The idea is that regulations should be amended to enable a household moving home to claim housing benefit on two properties for four weeks in circumstances in which it continues to have two rental liabilities but has not moved home. At present, housing benefit is paid for rent on two properties only when the household has moved to the new property. We are talking about the period before somebody moves to a new property and has liability for two rents, upon either of which housing benefit would be allowable.

By way of background, I would say that homeless households living in temporary accommodation often accrue arrears because, while they are not able to move into unfurnished, permanent accommodation atthe point at which they accept an offer of new accommodation—perhaps because it takes time to obtain furnishings for the new home—the liability for the rental on the new property cannot be delayed until such issues have been dealt with.

As a result of the anomaly to which I draw attention, the regulations governing entitlement to housing benefits on two homes can contribute to hardship, rent arrears and, sometimes, repeat homelessness. The new clause proposes a simplification of the existing rules to make them more symmetrical in terms of whether the person has moved to the new home during the four-week period. It would substantially improve the situation. I admit—I am sure that the Under-Secretary will say this too—that relatively few people are in such circumstances. Given her positive response to the last new clause, I hope that she can be similarly positive to this one.

Anne McGuire (Labour, Stirling)

I thank the hon. Gentleman for raising the issue. I hope that he will accept that the new clause is not necessary because the Social Security Contributions and Benefits Act 1992 already contains the power that it seeks to introduce. The difference is that the existing secondary legislation imposes restrictions in cases in which a customer is waiting for a decision on a social fund application. I shall come to that point in a moment.

Regulations made under the 1992 Act are in force and allow housing benefit to be paid for up to four weeks on the former home as well as on the new home if the customer has an unavoidable liability on the former home. Regulations are also in force to enable housing benefit to be paid once a customer has moved for up to four weeks prior to the date of the move if the delay in moving is due to his waiting for a decision to be made on a claim for a social fund payment in respect of a move, and if he is disabled or aged over 60 or has a child aged under five.

Tim Boswell (Conservative, Daventry)

I did not want to interrupt the Under-Secretary in the middle of what is clearly an important and complex technical point. However, she seems to be telling the Committee that although the payment relating to the new home could be backdated, it would not, by definition, be available on the first day of moving. Therefore, a tenant in that situation would potentially have a cash-flow problem.

Anne McGuire (Labour, Stirling)

That is the exact position, and weare looking to alleviate it. As the hon. Member for Inverness, Nairn, Badenoch and Strathspey says, there are circumstances in which people have difficulties. I know that the local Jobcentre Plus office in his constituency has had problems because the delay in processing community care grants is causing a delay for people in the position that he highlights.

We feel that the measure goes wide enough and that any further widening would be a matter for regulation rather than for primary legislation. Therefore, the issues under discussion are matters for regulation and not for the Bill.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I accept the point that the Under-Secretary is making. For the sake of the completeness of the debate, can she give the Committee an idea as to whether, in the light of this conversation, she is of the view that it might be worth while amending the regulations in order to allow the powers to be taken in the way that I describe, as opposed to the way in which they are currently taken?

Anne McGuire (Labour, Stirling)

The hon. Gentleman has raised a reasonable point. In the light of the examples that he has highlighted—and, given that we want to consult on the regulations—I hope he would accept that we do not want to disadvantage anybody. I will obviously reflect on this short debate to see whether, in the new regulations, we can accommodate what he admits are unusual but important circumstances for an individual. With those comments, I ask the hon. Gentleman to withdraw the motion.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the Under-Secretary for that response. I had not intended to draw particular attention to the circumstances in the local Jobcentre Plus, but she is quite right to draw the Committee’s attention to that as an example of the circumstances that I am trying to describe. I am particularly grateful for her undertaking to reflect further on whether the regulations might need to be updated in the light of some of these circumstances. I am therefore happy to withdraw the motion.

New Clause 11

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to move, That the Clause be read a Second time.

Again, I will try to be relatively brief but a few points need to be made here, and I hope that our debate will stimulate a further fleshing out from the Under-Secretary of the Government’s position on this important issue. This amendment would put into statute the regulation contained in section 91(1) of the Housing Benefit (General) Regulations 1987. Again, I am sure that I am only refreshing the Committee’s memory of this and I can see that the Under-Secretary is fully informed on this point already. The regulation requires local authorities to make payment on account of a rent allowance within 14 days of receipt, where an inability to make a decision on a case does not arise though a failure of a claimant to provide required information.

This duty exists in secondary legislation, which was the point the Under-Secretary made in response to the previous new clause that we debated. However, in relation to that, Shelter’s housing advice centres—and I am grateful to Shelter for this point in its briefing on new clause 11—report that the requirement is all too often ignored or, in some cases, treated as discretionary by local authorities. The idea here is that placing this obligation in the Bill will reiterate and underscore the vital importance of authorities making payments on account of a rent allowance.

The duty exists to avoid tenants falling into arrears at the outset of a tenancy and risking evictionand homelessness. Prompt payment is, obviously, particularly essential for private sector tenants—and evidence would bear this out—as their landlords are perhaps more likely to begin possession actions at an earlier stage than the relevant social landlord. It is also vital for ensuring that private sector landlords are willing to let to housing benefit claimants in the first place—an issue that I know we debated in one of our previous sittings, when the hon. Member for Colne Valley made particular points about that issue. Along with benefit shortfalls, long delays in beginning payments are cited by landlords as one of the main reasons for not wishing to let to housing benefit—or, in future, local housing allowance—claimants, so proper adherence to this regulation could go a long way to improving the private rented sector’s image of housing benefit, and so improve the ability of tenants to access that sort of accommodation.

It is worth saying that failure to make a payment on account is not considered an official decision, so there is no right of review or appeal. The only recourse for a claimant is judicial review, or to complain to the local government ombudsman. Although either course of action might, in the long run, get a proper remedy, both might cause lengthy delay and further problems for the claimant. Indeed, judicial review is not usually a proportionate form of recourse; it requires legal aid, a solicitor and court time. Also, while the ombudsman does good and worthwhile work, often reaching the right decision in the end, complaining to the ombudsman is not a particularly effective remedy in cases with a sense of urgency, as we would all agree is the position with such cases.

I hope that in her response the Under-Secretary again underscores the importance of following through the regulation consistently. By putting it into statute, we could ensure that all local authorities properly adhered to it so that potential tenants, tenants, benefit claimants and private sector landlords have a sense of security and understanding that the system works in the way in which it is intended to work. I hope that the she responds positively and explains how the Government intend to remedy the problem.

John Penrose (Conservative, Weston-Super-Mare)

I support the new clause. The hon. Gentleman has made several important points, and some deserve to be fleshed out more for the Under-Secretary to deal with. She gave us examples of how the Government have been pursuing various local authorities so that they shorten the delay that inevitably is incurred from the start of an application until payments come through. The various examples of local authorities that she gave as an illustration were tremendously impressive.

However, Shelter is clear that there is still an enormous variety of performance in different parts of the country. In some cases, authorities are at the worst end of the spectrum, while their neighbouring authorities are at the best end. Landlords, tenants and all of us as taxpayers are entitled to expect continued improvement. Many of the figures that the Under-Secretary quoted were those that had shortened from a 90-plus day delay to a 30-something day delay. They were excellent, but the new clause would make it clear that a couple of weeks is what the man in the street and all of us are instinctively entitled to expect as the usual level of efficiency from our local authority when it deals with such an important issue.

Progress may have been made, but there is still a fair distance to go and an unacceptable wide variety of performance in respect of the average figures that have been quoted to us. Those variations create a number of effects, such as hardship for tenants, examples of which we were given when discussing earlier clauses. The variety of performance also has a negative effect on landlords and on the supply of particular types of accommodation in the market. We have discussed the baleful effect of constrictions in supply in such matters and, thus, on tenants, which implies that a huge amount of work is still to be done.

If, for whatever reason in the future, the performance of local authorities either collectively or individually goes backwards and gets worse, which, goodness knows, given the burden of history might sadly be the case, we need to have a way to protect tenants from negative performance. We also need to ensure that a sword of Damocles is hanging over local authorities so that they know they will not receive a cash flow benefit from acting slowly and not performing. The new clause is vital, partly because it would give tenants a degree of certainty and a reasonable length of time that they are entitled to expect before their money comes in. It would also mean that local authorities do not have an incentive to allow their performance to slide. In fact, they would have a disincentive.

Jeremy Hunt (Conservative, South West Surrey)

Does my hon. Friend agree that one of the factors that can make the process take much longer than it should is the complexity of the assessment process? My hon. Friend the Member for Daventry sensibly referred to the minimum constraints and the Government making swifter progress in the sharing of information. If there were much better sharing of information, and hence sharing of verified information that the local authority could trust when making its assessment of entitlement to housing benefit, we would then be able to speed up the process considerably and achieve the important two-week period.

John Penrose (Conservative, Weston-Super-Mare)

My hon. Friend is exactly right, and his is a good example of a wider issue. If one is going to shorten the times much further, it will not be enough to act like a football coach on the sidelines and just shout louder and ask people to work harder. That will not achieve a delay time of two weeks or less, because other things have to be done too. Among them is a series of efficiency measures, some of which are concerned with the exchange of verifiable information, as my hon. Friend says. In addition, and wherever possible, processes and indeed benefits themselves should be redesigned—as attempted by many measures in the Bill—to make the intrinsic process simpler and faster. My hon. Friend the Member for Bury St. Edmunds spoke about attempting to achieve greater simplicity. If that can be designed into the system, it inevitably makes it far easier for the people who are working to achieve such goals.

David Ruffley (Conservative, Bury St Edmunds)

I wonder whether my hon. Friend misspoke. He said that I wanted to achieve simplicity, but of course that is in relation to the benefits system, not in relation to any part of my professional life.

John Penrose (Conservative, Weston-Super-Mare)

I thank my hon. Friend for that correction.

The new clause is important because it would give a guarantee. From the tenant’s and the landlord’s points of view, and also from the point of view of the market, it is important to deliver greater supply of suitable accommodation.

Jeremy Hunt (Conservative, South West Surrey)

Does my hon. Friend agree that the difficulty in the process of obtaining housing benefit acts as a work disincentive—for example, people might feel that on taking paid employment they would lose housing benefit, which would be difficult to recover should they fall on hard times? The complexity and the difficulty in benefits application procedures are themselves the cause of the benefits trap. Addressing that would result in my hon. Friend’s arguments having much wider benefit in encouraging people to move, when possible, back into the world of work.

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. I have been generous in allowing the hon. Gentleman to make two long interventions, but they should be shorter.

John Penrose (Conservative, Weston-Super-Mare)

Thank you, Mr. Hood.

I agree with much of what my hon. Friend said. The benefits of benefit simplification, rather than just straightforward simplification, go wider than mere cost reduction and shortened lead times. One such benefit is that it is unquestionably easier for people to access the benefits system. That is the case for housing benefit applications, and I am sure that there are other applications, which we will not consider today, that would nevertheless benefit from simplification. Simplification has greater benefits than just cost reduction and process efficiency. Behavioural benefits in how people react when they try to access the benefits system are a vital part of that. The Opposition support the new clause, and I hope that the Minister will respond to those points.

Kali Mountford (Labour, Colne Valley)

The Committee owes the hon. Member for Inverness, Nairn, Badenoch and Strathspey a debt of gratitude for the way in which he has concentrated on the new clauses. He rightly focused on the circumstances of individuals, their ability to pay rent on time, and the effect that that has on their lives. However, we should concentrate on ensuring that assessments are made quickly and are right first time, with a proper means for reassessment. That, I am afraid, takes us back a little to previous debates, in which I expressed the differing opinion that there may be a better way of getting the same effect.

The hon. Gentleman told the Committee that the measure can be implemented by regulation, but that he wants to see it in the Bill. However, I want a set of regulations that are thought through properly and work well together. I am making a bid for regulations that would fit alongside the provisions in the Bill and, in particular, that help to make decisions right first time and speedily.

I direct the Committee to our previous discussions on what rent officers do, how transparent their work is, and how well they work with other parts of local authorities and other agencies. I make a plea to my hon. Friend the Under-Secretary to think back to our discussions when she so kindly met me and the director CHAS Kirklees. We were thinking about improving the process so that decisions could be made speedily and more openly to ensure that information can be made available to everybody in the way in which, I think, the hon. Member for South-West Surrey indicated. If all the information is pulled together and open, and is readily available at the beginning of a process when housing allowance is set for an area, it would do a great deal to help speed up the process.

I am not saying that I do not want that measure available to local authorities, but I would like time to be made available for proper consideration of regulations and orders in further Committees to ensure that those other measures are available and are considered together. I make a second plea to my hon. Friend that during further consideration of the Bill, perhaps when it goes to the other place, she has another look at the recommendations and perhaps comes back to the House, either on Report or Third Reading, with proposals.

Anne McGuire (Labour, Stirling)

I thank hon. Members for their contributions. I am sure that the hon. Member for Inverness, Nairn, Badenoch and Stroganoff—sorry, it must be getting near lunch time; I meant to say Strathspey.

The hon. Gentleman probably expects me to say that the proposal is unnecessary because the power that he envisages is already in section 5(1)(r) of the Social Security Administration Act 1992, but having said that, he raises an interesting issue and one that is worthy of being aired in Committee.

The hon. Gentleman had the Committee’s support when he said that we want to protect tenants against accumulating rent arrears and, obviously, facing possible eviction even when they have fulfilled their side of the bargain by making an effective claim and providing the local authority with all the information that it needs to decide the claim. I think that that links in to some of the points made by my hon. Friend the Member for Colne Valley.

As I pointed out earlier, we have seen a dramatic improvement in the processing of housing benefits claims, as the hon. Member for Weston-super-Mare indicated. We recognise that a minority are still taking too long to process claims, which can lead to problems for the tenant. That is not what we want. Individuals should not be in the middle of a process that is designed to help them but, because of various failures, either bureaucratic or by individual professionals, instead leaves them with a liability to pay rent that they palpably cannot afford to do while they await their housing benefit claim.

As the hon. Gentleman clearly said, that is why we have the existing requirement for a payment on account when an authority is unable to decide a claim within 14 days, subject to the customer having provided all the necessary information. In some cases, the requirement would be more stringent than the one that he seeks because the date of the claim can precede that on which the claim was received. There is that nuance within the new clause.

As hon. Members have recognised, we are focusing our efforts on further improving authorities’ speed of decision making and the making of the first payment of housing benefit through inspections, quarterly monitoring and the setting of performance standards. We are dealing with 408 local authorities. Trying to get them to work to a set of standards where they have their own statutory responsibility for implementation has not always been easy.

We are also simplifying the housing benefit administration to speed up the processing times, for example through the local housing allowance. The hon. Gentleman’s proposal does not fit well into the increasing trend for housing benefit claims to be received by the Department for Work and Pensions. Around two thirds of housing benefit applications are currently made to the DWP initially. The local authorities do not become part of that process until later on. Increasingly, our intention is for both Jobcentre Plus and the Pension Service to offer customers a one-stop shop for benefits where claims to all benefits and information are provided and, in most cases, verified by a single process. The aim is to make the process more straightforward so that people do not have to go from one Department to a local authority and perhaps carry information back to another Department.

Increasingly claims for information will be gathered by the Department and then forwarded to the local authority. That is the point that my hon. Friend the Member for Colne Valley was highlighting. We want a process that is efficient and effective, that gathers the right information at the right time and gives the correct decision at the right time. That is what important to the individual claimant. While I am on the subject of my hon. Friend’s contribution, yes we want the housing benefit process to be as open as possible, consistent with protecting the independence of the rent officers. That came up in the discussion with my hon. Friend and her constituency organisations.

Because we are now gathering the information in the Department more and more through Jobcentre Plus and then forwarding it to the local authority, we recognise that local authorities need to wait for the information. But the pay-off for the local authorities and the individual is that, in many cases, most of the information will be fit for purpose. In other words and harking back to what my hon. Friend said, the local authority will have the information to make a decision on the claim at that first point. That is obviously something that we would all support.

Kali Mountford (Labour, Colne Valley)

I know that when we had our discussions with CHAS Kirklees, the Under-Secretary seemed surprised that some local authorities are a bit more restrictive in sharing information than she expected. Is she willing to look again at advice notes, guidance or regulations that might free up some of that information to make it the efficient method that she seeks?

Anne McGuire (Labour, Stirling)

My hon. Friend reflects the discussion that we had with CHAS, and the answer is yes. Consistent with protecting the independence of the assessment process so that rent officers are not unduly influenced either by the local authority, stakeholders or the private sector landlords, we want to see as much engagement as possible. I am happy to reiterate the commitment that I gave to her in private.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the Under-Secretary for describing the administrative improvements. I appreciate that a lot of hard of work is going into that and improvements are being made, not least through the one-stop shop approach. In cases where the benefit information is collected and processed by the DWP, Jobcentre Plus or the Pension Service and then forwarded to the local authority, does the 14-day rule also apply to the DWP and its agencies in the collection and processing of this information or does the clock start only when that information reaches the local authority? In terms of allowing for the interim payment of rent on account in the way that the regulations currently describe, that is an important point.

Anne McGuire (Labour, Stirling)

It is an important point and I hope to give the hon. Gentleman a definitive response to it during the debate. I put on record that more than80 per cent. of claims are dealt with within 14 days from the date of the claim when all the information has been provided by the customer. Every effort is made to ensure that the customer gives the information necessary, and some of the time scales reflect the fact that sometimes customers are not forthcoming with that information. The blame for delay in the process does not always fall on the local authority or the Department for Work and Pensions. As we said during the debates on the housing benefit clauses, we are determined to ensure that local authorities who have statutory responsibility for the operation of our housing benefit policy improve their game, as many have done.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey asked when the 14-day clock starts ticking. It starts from the date of the claim, which can be at the time when the claim is received by the DWP. I hope that that reassures him. A quick decision depends very much on the co-operation of the individual making the claim in responding to the request for information.

Our wider policies and approach on performance improvement, coupled with existing safeguards on the 14-day interim payment, are of greater benefit to customers than introducing more pre-decision requirements. To be frank, they could distract authorities from the main priority: getting decisions on claims made accurately and on time, a matter that was highlighted by my hon. Friend the Member for Colne Valley and by Opposition Members.

With those points of clarification, I hope that the hon. Gentleman will consider withdrawing his new clause. Once again, I thank him for raising an important issue, which allowed us to reflect on the improvements that need to be made to the process. I am sure that the officers of the 408 local authorities are hanging on our every word on this matter.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the Under-Secretary for her response, which rightly emphasised the ongoing efforts to improve the speed of administration. I recently took part in a conference on working age benefits with the Minister for Employment and Welfare Reform, who said that, in relation to working age benefits, even a two-week processing time was too long and asked why benefit claimants should have to wait two weeks for decisions that in the private sector would be made in a matter of days. I am not sure that it was a target, but it may have been a long-term aspiration and if that is the context of the Government’s overall thinking on the issue, it is to be welcomed.

The reasoning behind the new clause relates to the cases of a minority of claimants in which the Minister’s aspirations were not met. I appreciate the points made by the hon. Member for Colne Valley and the Under-Secretary’s remarks, with one proviso: I hope that she will use the full power of her ministerial office to remind local authorities of their obligations under the existing regulations. My point was less about the rectitude and value of current regulations and more about their non-observance by many local authorities. Perhaps the Under-Secretary or the Secretary of State could issue a stern reminder to local authorities oftheir obligations under the regulations. With that imprecation, I beg to ask leave to withdraw the motion.

New Clause 16

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to move, That the clause be read a Second Time.

This new clause relates to the treatment of awardsof existing housing benefit. Schedule 4 provides for regulations that will make provision for the transition of those people receiving incapacity benefit on to the employment and support allowance instead. However, the Bill includes no similar provision in relation to housing benefit, so I look forward to the Minister’s response.

In her previous remarks, the Under-Secretary made it clear that the Government’s intention is that the new local housing allowance system should apply to new claimants only and that it is not their intention to remove people who are in receipt of housing benefit to the new local housing allowance. The new allowance will be rolled out on a new claims only basis. Ministers have made clear previously that, after two years, the Government intend to review the situation and consider transferring any remaining claimants on to local housing allowance.

I am grateful to the Citizens Advice, in particular, for its comments on this proposal. There are a number of potential criticisms to which I look forward to hearing the Minister’s answer. First, that this is an untested approach. Under the local housing allowance, two approaches to implementation were piloted. The phased approach meant that new claims were transferred on to the local housing allowance immediately and existing claims were transferred gradually when their claim was reviewed or renewed. Secondly, in another of the pathfinder areas, there was a big-bang approach. All the claims were transferred from day one. Both approaches were extensively assessed in the DWP’s evaluation of the pathfinder areas, which runs to several volumes. I know that every word of them will have been studied by members of this Committee.

For the natural roll-out, the DWP is now proposing a third approach that has not had the benefit of having been piloted or assessed in any of the pathfinder areas. In his response, could the Minister set out what lessons the Government drew from the evaluation of approaches one and two which have led him—if he will pardon my choice of phrase—to choose a third way in relation to the transitional arrangements?

The proposed implementation approach could be seen to undermine one of the key principles thatwould guide the development of the local housing allowance—the promotion of greater fairness. Under the Government’s proposals, similar households with identical incomes and rent levels may end up receiving different levels of housing benefits for an undefined period of at least two years. Some claimants may face a shortfall between their benefit and their rent, whereas others in identical circumstances might receive an excess.

In addition, local authorities will be required to keep the two systems of administration running in parallel. The hon. Member for Colne Valley has made repeated references to the need for rent officers to be more open. I fully agree with that, but if rent officers are going to be asked to provide information for two systems that will run in parallel for at least two years for existing claimants versus new claimants, one suspects that there is another difficulty facing that particular group of people. I look forward to hearing from the Minister how that is being thought through and why this conclusion has been reached.

That relates to another point that I hope the Minister will address. Where the local housing allowance results in a higher level of benefits, there will be a risk that some landlords—and I appreciate that this may only apply to a small minority of them—may seek to evict the existing tenants in order to let to new tenants on the higher rate of the new benefits. Although that may only apply in a small minority of cases, it is a risk that has to be weighed in the balance in relation to these transitional arrangements. It is worth noting that some citizens advice bureaux, working in the pathfinder areas, have reported many cases of landlords increasing their rent up to—

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

It is a pleasure to be back here this afternoon under your chairmanship, Mr. Hood. I shall pick up where I left off in moving new clause 16. Ministers have previously suggested that they have no plans to make local housing allowance available to existing housing benefit claimants, but that position will be reviewed after a two-year period. I have expressed several concerns, not least the risk that landlords will seek to evict their existing tenants to let to new tenants at a higher rate, if local housing allowance happens to be at a higher rate. Local citizens advice bureaux have reported many cases of landlords increasing their rent to local housing allowance level.

It seems not impossible, although I am not a fortune teller, that landlords will respond similarly in the national roll-out and will not necessarily distinguish, in their rent-setting behaviour, between tenants whose housing benefit is assessed under the existing rules and those whose housing benefit is assessed under the local housing allowance rules. That could leave some tenants at a disadvantage. One can envisage a situation in which some landlords would be pushing rents up towards the local housing allowance level, causing shortfalls, potentially, among the tenants who were in receipt of existing housing benefits.

The new clause, as I said earlier when probing the Government’s intentions, would address the problems by allowing existing claimants to choose whether to transfer on to local housing allowance, or, at any rate, by giving the Secretary of State powers to make regulations to allow that to happen. Such an approach would be consistent with another of the Government’s priorities for the local housing allowance, which was, after all, to promote choice, in terms of shopping around with benefits and local housing allowance. In addition, such an approach could perhaps ease acceptance among claimants of some of the changes, because it would allow them greater choice.

Jim Murphy (Labour, East Renfrewshire)

It is a particular delight to welcome you, Mr. Hood, to the Chair in our third from final sitting of the Committee, where, as the hon. Member for Bury St. Edmunds said, we have had particular consensus about important principles. He of course alluded to the lack of such consensus yesterday in the Chamber. [Interruption.] That demonstrates again once and for all that there are substantial—

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. I feel obliged to remind Opposition as much as Government Members that we expect better order in this Committee.

Jim Murphy (Labour, East Renfrewshire)

You are right, Mr. Hood, because that behaviour was worse than anything in the Chamber yesterday. Nevertheless, the level of disagreement yesterday demonstrates that there are substantial policy and priority differences between the two major parties, particularly about poverty and child poverty. The Bill is an important contribution in that area; I remind hon. Members that one in six of current incapacity benefit customers has a dependent child and the Bill would make a substantial impact on the child poverty measurement.

I acknowledge the comments on new clause 40 made by the hon. Member for Daventry in the debate on new clause 38. I thank him for giving us advance notice of his questions and comments in that way.

Tim Boswell (Conservative, Daventry)

For the avoidance of doubt, or perhaps to avoid concern on the part of the Committee, I think that the Minister means clauses 38 and 40—not new clauses. Fertile we may be on these Benches; disrespectful and even stroppy we may be from time to time. Nevertheless, our book does not run to creating 38 new clauses, although, if tempted, we might be inclined to add to their number.

Jim Murphy (Labour, East Renfrewshire)

As is often the case, the hon. Member for Daventry is entirely right. Of course, it was clause 38 rather than new clause 38. I was going on to compliment the hon. Gentleman, but I do not know whether I should do so now. It is a matter of public record that he has chosen to serve his remaining time in Parliament on the Back Benches, and we have seen over the years that he has been a free thinker on the Front Benches as often as one can be. We look forward to his continuing contributions from the Back Benches. He is someone to whom compassionate Conservatism came naturally over the years, whereas for others, it seems that that is not their mother tongue. However, the hon. Member for Bury St. Edmunds has done very well thus far in convincing the Committee that it is indeed his second language.

I turn to the points made by the hon. Member for Inverness, Nairn, Badenoch and Strathspey. The tone in which he offered his comments suggests that it was a probing new clause. As he rightly said, we intend to begin by rolling out local housing allowance only to new claimants and to those existing claimants who move house. Although that is different from the approach taken in pathfinders, there are good reasons for doing it.

The Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Stirling (Mrs. McGuire)—I take a temporary foray into her area of expertise in local housing allowance—has commented before on the matter. The evaluation reports have made clear the importance of effective and targeted communication and support. Although some customers will be able to handle the transition to manage their own benefits effortlessly, there will, of course, be others who need more help and support. That is an important lesson learned from the pilot tests held across the country. At national roll-out, we think that it will be important to target support where it is most needed, rolling out new claims only, to allow us and local authorities to concentrate our resources and efforts on that target group.

On the other hand, extending the provisions to all—new and existing—claimants from day one would dilute the available support, and would not enable such a controlled implementation, which I know that all members of the Committee would wish to see. As noted during our earlier discussions, a smooth implementation will in part depend on the success of local authority IT systems.

As noted in the 15th monthly operational report, which I am sure the hon. Member for Inverness, Nairn, Badenoch and Strathspey has in his folder and would be able to quote from in some detail, a number of local authorities experienced technical problems in re-assessing awards on the anniversary. Brighton and Hove was the first big bang authority to do that, and its impact was underestimated. It was, as one interviewee put it, “almost like starting again.” That contrasts with those authorities that phased in the introduction: there, the annual assessment of awards presented no problems.

In addition, careful consideration was given to the Green Paper respondents’ views on the issue. Although some stakeholders were concerned about the potential administrative complexity, others were keen to see the gradual implementation that we envisaged in the Bill. For example, the National Housing Federation supported that approach. The Chartered Institute of Housing strongly supported the phased approach to implementation, recognised the importance of doing the groundwork before roll-out, and appreciated the potential risks posed by such a large-scale change for 408 separate local authorities.

I hope that I can also reassure the hon. Gentleman about his fear of landlords’ behaviour about eviction of customers.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

Before the Minister moves on from his point about learning from the pilot experiences, he has quite rightly talked about the benefits of the phased approach. However, as I understand it, the approach now proposed by the Government is different from the phased approach that took place in the pilots. That approach transferred people from the old benefit to the new benefit at the time when their benefit claim was reviewed or re-assessed, whereas what the Government are talking about in this case is not transferring people even at that assessment period for a period of at least two years.

Jim Murphy (Labour, East Renfrewshire)

I want to say a few words, if the hon. Gentleman will allow me. Six out of the nine pathfinder local authorities chose the phased approach, so the principle of the phased approach is well established. Of course, the way in which that phase-in works has been changed as we look towards national roll-out, but the principle of phased introduction is well established in two thirds of the pathfinder local authorities that were involved in the pilots.

As I have already said, offering such technical detailed advice to our customers has been a great learning experience and it has empowered them to make the transfer from housing benefit to local housing allowance. As well as learning from that experience we are seeking to ensure that the various resources for advice—including the civil service, local authority advisers and welfare rights officers—can support customers in the way that we envisage by means of the phasing that is set out in the Bill.

The hon. Member for Inverness, Nairn, Badenoch and Strathspey mentioned a reasonable concern about landlords—a concern that others may have, too. The lessons of the pathfinders programme should be considered, however, because there is no evidence from that programme of such behaviour by landlords. Despite that, there will be a continuing closely examined review of local housing allowance during a two-year period, and as the national roll-out is implemented the concern that he has mentioned will be a factor in assessing its effectiveness.

We recognise the hon. Gentleman’s concern that local authorities will be required for a period to operate two separate, parallel schemes. As he said, existing housing benefit arrangements will need to run alongside local housing allowance. He was also concerned about existing customers being denied access, and about the number of people who will not be transferred to local housing allowance. Let me share with him some of our assessments of the likely turnover numbers. The turnover rate in the private sector is naturally very high, as he is aware. We estimate that within a three-year period only 20 to 25 per cent. of customers in the deregulated private rented sector will remain on housing benefit. The rest will have moved on to local housing allowance or off housing benefit altogether. That is, three quarters will be transferred over to local housing allowance or will not be on the benefit at all.

I have already alluded to our plans to review the impact of local housing allowance after the first two years. One of the main aims of that review will be to consider options for transferring housing benefit customers in the private sector to local housing allowance if, at that time, such a step is considered necessary. We therefore believe that our approach will allow us to extend the benefits of LHA to all, at the earliest opportunity, while managing the risks inherent in such a fundamental and wide-ranging change in the benefits system—a system that is administered by 408 separate local authorities. I hope that that reassures the hon. Gentleman sufficiently for him to withdraw the motion.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful for that response. I am not sure that the Minister has answered all my concerns in detail, but I hope that that will be addressed as the Bill goes through another place. In the meantime, I beg to ask leave to withdraw the motion.

New Clause 17

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to move, That the clause be read a Second time.

The new clause relates to the process by which overpayments of housing benefit are legally recoverable. The Committee will know that, under the current housing benefit regulations, all overpayments are recoverable unless three conditions are satisfied: that overpayment was caused by official error; that the claimant did not cause that error; and that the claimant could not reasonably have realised that an overpayment had been made.

The new clause probes the Government’s thinking on how to deal with overpayments of housing benefit. The test that I have described—in particular the third element—is harsher than that for other Department for Work and Pensions benefits. As I understand it—I am sure that the Minister will correct me if I am wrong—the tests for those benefits do not include the third element. The new clause probes whether that additional third hurdle is reasonable.

Once again, I am indebted to Citizens Advice and Shelter for some useful briefings. Perhaps I should have stated earlier that I am vice-chair of the all-party group on citizens advice. I am not sure if that counts as an interest, but it certainly makes me interested. [Interruption.] I would not go too far. Citizens advice bureaux report regularly their concerns that overpayments are being recovered despite the fact that claimants have promptly and correctly reported their full circumstances and the overpayment is due to an official error or failure to act promptly on information provided by claimants in a timely, correct and appropriate way.

Failure to recover overpayments has an impacton local authorities’ performance targets so theyare reluctant—perhaps understandably—to use their discretion not to recover the money. In some cases, the resultant debt caused by somebody realising that there has been an overpayment that must be repaid, much like the problems in the tax credit system, puts a major strain on the household budget of the claimant, who by definition of the fact that they are in receipt of housing benefit is on a low income.

Where the claimant already has a suspended possession order against them and is repaying rent arrears, for example, on a set rate over a set time, the additional burden of repaying a housing benefit overpayment can easily tip them into breaching an order and facing eviction. The consequences of asking people to repay overpayments in circumstances in which they have done everything right except understand the rather byzantine and complex way in which housing benefit calculations are made can be serious, and in some cases cause severe hardship to claimants. In that shared spirit of concern about those in such circumstances, I look forward to the Minister’s response.

In many cases, it seems that the root of the problem is the regulation that allows the recovery of overpayments even in cases of administrative error, if the person ought reasonably to have known that they were being overpaid. It is worthy of the Committee’s consideration that the complexity of the housing benefit regulations, the scheme and scheme application process means that collecting overpayments on those grounds could in some case be unreasonable. I hope that the Minister will respond to that point in his reply to this short debate.

A further issue is that sometimes, in cases in which repayment is demanded even when someone has done everything that could possibly have been expected of them, bar understanding the complex procedures that would have been necessary for them to have realised that they were being overpaid, claimants do not seek advice and simply accept the overpayment recovery as inevitable and pay up. I am sure that many hon. Members in this Committee will have had that experience, not least in connection with tax credits, but I am sure in connection with other benefits as well. Those people have to cope with the consequences, which are likely to be long-term rent arrears threatening their housing security and living standards. As a result, they are more likely to get into debt in other areas. I know that the Minister is rightly concerned about child poverty. He will be aware of the impact that such long-term financial considerations can have on child poverty and I hope that he will look at the new clause in that light.

In his response, I would like the Minister to address the contention that, in the cause of fairness and benefits simplification, which we have been discussing, the housing benefits rules should be aligned with those of other means-tested benefits by removing from the provisions the words “reasonably have been expected” to realise, so that overpayments are recoverable only if the claimant has failed to disclose or misrepresented a material fact. Running through the Bill is the underlying principle of responsibility and we have debated during earlier clauses the idea of reciprocal responsibility. It is quite right that the claimants should have responsibilities—indeed, local housing allowance in particular will increase those responsibilities by giving claimants responsibility for paying rent themselves—but surely authorities have responsibilities too. Local authorities have a responsibility when they have made an error not caused by the claimant. Surely they should accept that rather than expect repayment to be made in all such circumstances. I look forward to the Minister’s response.

Tim Boswell (Conservative, Daventry)

I need make only a brief contribution. I sympathise very much with the spirit of the hon. Gentleman’s comments in moving the new clause. As a matter of what might be termed judicial reasonableness, Ministers are at least obliged to share with the Committee why the hurdles should be set slightly differently for housing benefit than for other benefits. That is not just some sort of lawyer’s quibble; it is a substantive issue.

I understand that to the extent to which something is obviously wrong, there is an obligation on the citizen to do something about it. I will share with the Committee an experience from my association with a not-for-profit organisation. We recently received a cheque for a six-figure sum from the Department for Work and Pensions. As it was mentioned to me by the treasurer, I had the opportunity to draw it to the attention of the Secretary of State—who I hope did not pocket the amount—and we got it back to the right place. It is perfectly reasonable when dealing with such people—the turnover of the organisation was rather less than £10,000 a year—to say, “Something has gone wrong, and we really ought to do something about it.” We can be good-natured about that.

I must admit to the Minister of State that I do not always agree with him on political issues, but I agree that I might have been a little sharper in my exchanges yesterday with his colleague the Under-Secretary of State for Work and Pensions, the hon. Member for Warwick and Leamington, on official error. I was somewhat surprised by his colleague’s assertion that only a quarter of overpayments related to official error rather than client or customer error. We will not debate that at length now, but the fact is that a significant number do arise from official error—too many for comfort. That is partly a function of the benefits system, and it is important that we should get to the bottom of it, see why it happens and get it rectified, which is the most important thing.

Our constituents who might claim, even more than some of us, to know a little bit about this complex system, are not expected to sit an exam on the details of the benefits system. They also have a perfectly natural predisposition to say that if the calculation is an official calculation it is likely to be right. I am not talking about people getting a cheque for £250,000 in the post as their housing benefit; I am talking about comparatively minor overpayments that are not easily spottable.

Adam Afriyie (Conservative, Windsor)

I am sure that my hon. Friend is aware that people with dyslexia or learning difficulties have great trouble reading multi-page forms and letters on benefits from local authorities and central Government. That exacerbates the issue.

Tim Boswell (Conservative, Daventry)

I entirely agree. My wife used to be an adult literacy practitioner, and my hon. Friend accurately reports the experience of many people in that position.

I ask the Minister of State to reflect on one further point. I do not know the answer; I raise it in a spirit of inquiry. We had a little fun yesterday about the error taskforce. The error taskforce has an important job to carry out, and I would like it to do so properly and be resourced to do so. I am not entirely clear whether its remit extends directly or indirectly to local authorities’ performance in overpayments of housing benefit. Administration of housing benefit is a function derived from statute but devolved by the Secretary of State to them as local housing authorities. It would make a lot of sense, given that it is for all practical purposes a social security benefit, if the error taskforce were able to investigate local authorities to see, for example, whether there are significant differences in performance between the 408 local authorities, as I suspect there are, or between the local authorities system and what one might call the central benefits system.

We in this Committee have a common interest in trying to get the regime right, minimising errors at source and being fair to citizens if an error occurs. Trying to tease out the right balance in doing so is the spirit of the hon. Gentleman’s new clause, and I hope that the Minister will reply accordingly.

Jim Murphy (Labour, East Renfrewshire)

The hon. Member for Inverness, Nairn, Badenoch and Strathspey was right to pay his compliments to Citizens Advice. Hon. Members on both sides of the House will likewise pay tribute to Citizens Advice nationally, and, more importantly, at local level for its phenomenal work in supporting people in communities throughout the length and breadth of the United Kingdom, not least in my constituency where a fantastic woman called Teresa O’Hara manages the citizens advice bureau in Barrhead to great effect.

The hon. Gentleman said that in tabling his probing new clause, he was motivated to make non-recoverable those overpayments in housing benefit and council tax benefit caused by DWP official error. I say first that the Government were minded to treat that type of overpayment in the way envisaged in the new clause. An addition to primary legislation would not be necessary, as current powers mean that the Secretary of State could do that by way of regulations if he were so minded. However, the Government do not intend to do that; all types of housing benefit and council tax benefit overpayments are recoverable from the customer, including those caused by DWP, Her Majesty’s Revenue and Customs, and the local authority itself.

That type of overpayment can be recovered only if the customer could reasonably have been expected to realise that they were being overpaid. Only then should recovery be pursued. If that were not the case, people would be allowed to keep taxpayers’ money when they knew they were being overpaid. That is not reasonable, and I do not believe any hon. Member would consider that to be a reasonable way for a Government to behave. If we were to try to convince the Committee that it was reasonable, I suspect that a series of alternative amendments would be tabled, quite fairly, to say that it was not.

Tim Boswell (Conservative, Daventry)

We all understand the outlying case, such as the one I cited, half in jest, about a six-figure overpayment. The insidious and difficult case is one in which the citizen or claimant is receiving slightly more than they should, so there is a grey area as to whether they, a non-expert on the social security system, thought, “Well, that is a bit more than I was expecting, but if that is what they sent me they must be right.” That is different from a grossly obvious overpayment. It is easier to see that something is wrong if the overpayment is a thousand quid a week than if it is a tenner a week.

Jim Murphy (Labour, East Renfrewshire)

The hon. Gentleman makes a fair point, which is why the customer has the right to appeal against the decision to recover overpayment. That is the important protection within the system.

The DWP seeks repayment of overpayments under common law. Housing benefit and council tax benefit are treated as they are in terms of the recovery of overpayment primarily because the customer would be expected to know their rent level and their council tax liability, so the types of wild fluctuation that the hon. Member for Daventry reasonably raised would be easily identifiable within a housing or council tax benefit payment.

I hope that that reassures hon. Members on both sides of the Committee. We know from constituency case work—the letters we receive from constituents and the people who attend our surgeries—that the matter causes frustration and worry. That is why the balance of the challenge is on reasonable expectations, and why people have the right to appeal against a decision. We must also ensure that recovery measures are implemented sensitively, so that the customer—the citizen—can afford the repayment from their remaining income. That is important, particularly in the context of child poverty and family poverty in general. Although it might not have a dramatic impact on the 60 per cent. median income measure of relative poverty, it will have an acute impact at a local level on material and absolute poverty. We should not lose sight of that as we roll out the local housing allowance and try to get the system absolutely right.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

Probably the nub of the debate is the meaning of the word “reasonable”; perhaps it always was. The way in which the Minister described the meaning of the word was reasonable, and I think that all members of the Committee would agree with it. My concern was that in some specific cases the implementation on the ground is not as reasonable as the Minister described. I am reassured by his remarks, but I hope that he will monitor carefully the local implementation of the provisions to ensure that the reasonableness provision is not used, contrary the intentions behind it, to require claimants to have a level of knowledge and understanding of the benefit system that might only be held by a few academics, and perhaps not even to members of the Committee. I beg to ask leave to withdraw the motion.

Clause 40

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to move amendmentNo. 168, in clause 40, page 33, line 6, after ‘evidence’, insert ‘other than medical evidence’.

Jimmy Hood (Labour, Lanark and Hamilton East)

With this it will be convenient to discuss amendment No. 169, in clause 41, page 34, line 23, after second ‘information’, insert ‘excluding medical information’.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I shall be brief. There are broader issues, some of which were raised earlier by the hon. Member for Daventry, that we might consider in a clause stand part debate.

The amendments would exclude medical information from the information that can be shared under clauses 40 and 41. The reason is pretty simple and straightforward: as I hope all members of the Committee agree, medical information is particularly personal and is, with good reason, subject to a great degree of confidentiality in the medical system. Without such an exclusion, there is a risk that medical information about claimants could float around the system, being passed back and forth between agencies. That could include potentially sensitive, personal medical information. Is there not a risk that relatives or other people known to a claimant could get access to their medical information through the mechanism in the clauses? It is an important principle that medical information about an individual should be subject to very high standards of confidentiality and of appropriateness before being shared with any other agency. I hope that the Minister can allay my concern.

Tim Boswell (Conservative, Daventry)

Again, I find myself much in sympathy with the hon. Gentleman. His remarks are of course consistent with what I said earlier. Does he agree that the important principle is that of consent? I believe that one of his amendments to a later clause confirms that he does. The consent of the client should be obtained before information is released to others, particularly if it is of the highly sensitive nature that the hon. Gentleman describes.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful for that intervention. As the hon. Gentleman says, an amendment I tabled to a later clause refers explicitly not only to consent but to informing someone when information has been shared. That is an important principle and applies even more strongly to medical information than to almost any other category of information that we might debate under the clause.

The point is plain, and I hope that the Minister will reassure us, ideally by accepting the amendments, which would improve the Bill no end, if I may say so. If he feels unable to do that, I hope that he will at least give the Committee an undertaking to reflect further on how explicit protection for medical information can be put into the Bill within the provisions on information sharing for social security.

Adam Afriyie (Conservative, Windsor)

I shall be brief. First, could the Minister say what role, if any, the Data Protection Act 1998 plays in relation to the exchange of such information between the DWP and, as subsequent clauses will show us, other local authorities and county councils?

Secondly, I assume that most of the data exchange will take place primarily on computer systems, although I suspect a large degree will be on physical paperwork. Can the Minister give us some reassurance that the IT systems in use, or those that will be used, are able to protect certain categories of information from general viewing by all people who can access those systems?

My primary reason for speaking to the amendment is directly linked to my concern that relatives or associates of the claimants and customers who have their medical information on the system might be able to see their details. That might be a former partner, or a close or distant relative of the individual in question. The idea that their medical records—or medical data exchanged between authorities—are freely available to somebody with a clear right to access the system, and a need to access it in exercising their functions, means that there is a deep concern about the potentially detrimental impact on that person’s privacy and relationships, and perhaps even on their family situation.

Jim Murphy (Labour, East Renfrewshire)

I am pleased to have the chance to respond to this brief debate. I absolutely agree with the hon. Member for Inverness, Nairn, Badenoch and Strathspey that we need very high standards of protection. I assure him that that is what we seek to do through the Bill. He put it colloquially, but that I do not think that accepting his amendments would improve the Bill no end.

The hon. Members for Daventry and for Windsor made some entirely reasonable points. I confirm to them and to the rest of the Committee that section 123 of the Social Security Administration Act 1992 provides that it is a criminal offence to divulge any social security information, including medical information. That safeguard will apply in new section 7B of the 1992 Act as well as in amended section 7A. Clause 41 also considers medical evidence, while clause 42 complements the 1992 Act by making it a criminal offence to divulge that information. In this context, “information” includes medical evidence. I hope that that reassures hon. Members that it is a criminal offence to carry out the type of activity about which they raised concerns.

As the hon. Member for Inverness, Nairn, Badenoch and Strathspey was fair enough to acknowledge, amendments 168 and 169 would limit the sharing and use of information under the clauses to non-medical information. Amendment 168 would prevent medical evidence gathered in connection with a claim to a benefit from being used for a prescribed, relevant purpose. Here, a relevant purpose is set out in regulation 6 of the draft Social Security (Claims and Information) Regulations 2007. It is a while since we thumbed through the documents that we had at the start of our proceedings when we were talking about Employment and Support Allowance, but it is on pages 125 to 128 of the draft regulations before the Committee. I know that the hon. Gentleman carries those with him religiously, so if he wishes to ask about specifics, he can of course do so.

Adam Afriyie (Conservative, Windsor)

If medical evidence or records are disclosed, the information sheets that I have seen—partially for my own records—are all put together in one bundle or on one screen, without much shielding of other information. Will the Minister reassure the Committee that only the relevant parts of such medical evidence will be disclosed, not the entire file or section?

Jim Murphy (Labour, East Renfrewshire)

The hon. Gentleman again makes an entirely fair point: we are discussing the disclosure of appropriate medical evidence rather than the divulging of entire medical records.

The relevant purposes are contained in the draft regulations. At this stage, they are only draft regulations, and hon. Members and others can reflect on their contents and offer observations about their potential operation, as they can about all draft regulations that we provided to the Committee in October.

One function of clause 40 is to enable local authorities administering housing benefit in English county councils to promote the take-up of benefits administered by the Department. Such benefits, which are listed in draft regulation 6(b), include those in which the provision of medical evidence in support of a claim is necessary. The words “is necessary” are important. The benefits include incapacity benefit, employment and support allowance and disability living allowance. It is right to support customers in making claims for benefits to which they are entitled. Removing the ability to use medical evidence when appropriate to encourage and assist customers in making such claims would hamper that objective, particularly in relation to joint team activity or targeting at certain customers, including older customers.

Many of us in our constituencies or elsewhere will have seen that joint team working. I have seen it in the east end of Glasgow and in Liverpool. We have already discussed the Streets Ahead project in Liverpool, where different agencies come together and literally knock on people’s doors and offer joint advice and support. It is an innovation in customer care and support, but we must share that information better and make it more joined up for our customers. As we roll out the city strategy consortiums, there is an opportunity for co-ordinated and coherent customer support. However, it will be based on the appropriate sharing of information among all consortium participants.

In some joint teams, local authorities administering housing benefit and English county councils work together as agents of the DWP to collect claims information and evidence, including medical evidence. I stress that people are not required to make a claim or to provide evidence to a joint team. They remain in control throughout, and they can opt to make their claim direct to DWP if they prefer.

Amendment No. 169 might prevent local authority welfare services teams from confirming with DWP or local authority benefit teams that the means test for certain benefits has been met. I am sure that that is not the intention of the hon. Member for Inverness, Nairn, Badenoch and Strathspey. Welfare services teams would have to continue to duplicate the activity of the benefit teams by collecting and considering financial information needed to decide whether a customer meets the means test for welfare services assistance. That would run contrary to his well intentioned and well founded public policy statement, and his rhetoric about and intentions towards our deliberations.

The amendment would hinder a local authority’s decision about whether housing benefit should be paid to a tenant or to a landlord. The decision hinges on whether a customer is considered to have difficulty managing their own affairs and whether they would be likely to misuse their benefit—in other words, whether they are a vulnerable customer. Information concerning a customer’s medical condition would greatly influence that decision. That is acknowledged throughout the Committee.

The information gateway in subsection (2) would enable housing benefit teams to receive information about a customer’s vulnerability from welfare services teams. The decision of the housing benefit authority will be subject to appeal to an independent tribunal if either the customer or their landlord disagrees with the authority’s opinion. It is therefore essential for the authority to have a firm and complete basis on which to make its decision, including appropriate—I stress the word “appropriate”—medical information.

I appreciate the hon. Gentleman’s concerns. He raised them in the correct spirit and, I believe, in a probing sense. We will exercise control through regulations made under clauses 40 and 41, and I invite him to offer observations about the draft regulations. For example, the effect of draft regulation 7(2)(c) of the Social Security (Claims and Information) Regulations 2007, which are to be made under clause 40, is to permit a local authority administering housing benefit and English county councils to verify information and evidence received from a customer making a claim for a benefit administered by the Department for Work and Pensions. However, the regulations specify that those authorities may not verify medical evidence, as it is not for them to do so, and must instead forward it to the Secretary of State.

Tim Boswell (Conservative, Daventry)

The Minister of State is helping to address the Committee’s concerns about this matter. Will he say something about the situation where information is properly transferred because it is relevant to the payment of a benefit or where it is transferred for some other perfectly acceptable purpose and is then not well controlled within the receiving authority? In the real world, some of our concerns are not about whether the gateway is passed, but about the situation once it has been passed. Even if it were well understood on one side of the gateway that the information was not to be made available to third parties, when it reaches the team on the other side the security might be insufficient to confine it only to those who need to know it. Sensitive information that started in the right hands may pass through again to the right hands but may somehow leak from them to a wider number of people, in the local authority or otherwise, some of whom might be bent or might find it appropriate to misuse it. Such a situation would concern us a lot.

Jim Murphy (Labour, East Renfrewshire)

Typically, the hon. Gentleman raises a reasonable concern. His specific point captures some of the worries raised by the hon. Members for Inverness, Nairn, Badenoch and Strathspey, and for Windsor. It would be a criminal offence to violate the protections that we envisage in the Bill and the regulations, and the principles of the Data Protection Act 1998 are taken into account—a point raised by the hon. Member for Windsor.

The measures aim to ensure that the information must be relevant, a point to which I have alluded, and be obtained and processed lawfully. It would be forbidden to check NHS databases, for example. These legal safeguards are important. We are extending convenience and better support for our customers, many of whom, as we are all aware, are in a vulnerable situation, and it is important that protections go alongside that improved service.

As well as the legal protections, to which I have alluded at length, there is the additional safeguard that benefit and social services staff are subject to their own disciplinary codes, which carry the ultimate sanction of dismissal for the types of situations that the hon. Gentleman has mentioned—the unlawful use or disclosure of information. Local authorities are subject to the 1998 Act, and information on computers and elsewhere has to be held securely.

Adam Afriyie (Conservative, Windsor)

This is just a quick reminder of the question I raised earlier. It relates to safeguards to prevent a relative or former relative of somebody who is claiming a benefit, or someone who has been in a relationship with such a person, from seeing their records. I am sure that there must be such a provision somewhere in local authority procedures or regulations. Will the Minister of State offer reassurance by pointing to where the restriction exists?

Jim Murphy (Labour, East Renfrewshire)

I have mentioned that disclosure of medical evidence of this sort would be a criminal offence and that IT systems in local authorities and elsewhere are covered by the 1998 Act and additionally by the staff disciplinary process. How local authorities carry out such functions and undertake the powers in respect of a “relevant person” and a “relevant purpose” has been discussed in this Committee. Section 2(1) of the Local Government Act 2000 gives every local authority the power to do anything that

“they consider is likely to achieve ... the promotion or improvement of the economic well-being of their area”

and

“social well-being of their area.”

Of course, that includes the opportunity to support customers and join up services to support them. However, they do so in the context of the disclosure of medical evidence being a criminal offence. They are also covered by the data protection arrangements and must act entirely within the disciplinary codes. Those three checks provide a triple lock on the misuse of the information.

Tim Boswell (Conservative, Daventry)

I am still troubled by a point that may arise from my relative ignorance about the provisions of the Data Protection Act 1998. What would happen in respect of a person in a local authority receiving information about someone with whom they previously had a connection, when they would normally be the person to whom that information would be relayed? Sometimes an allegation is made, for example, that somebody’s estranged partner who happens to work in a local authority has a downer about a planning application. There may be nothing improper in that person handling such data normally, but if they had a clash of interests because they were aware of another person—just as a judge in hearing a case may be conflicted—can the Minister assure us that they would not be the one handling the data? Would he be satisfied that the local authority in question would say, “X may not handle this case, because they are declaring an interest in the person, so Y will take it on”? It is not a matter of an improper release of information under criminal charges, but a question of the person who would normally deal with such information not being appropriate in that particular circumstance.

Jim Murphy (Labour, East Renfrewshire)

In concluding, as I have said already, it is about access to relevant medical evidence, rather than medical records. The triple protection that I have spoken about—the criminal offence, data protection and the codes of conduct and disciplinary process—is important. However, the hon. Gentleman makes a reasonable point. Our constituents do not just raise concerns about a relative or an estranged relative: they could be concerned about a neighbour or anyone with whom they have a disagreement, gripe or grudge; or they may have another reason not to trust a person’s judgment.

I am sure that the hon. Member for Daventry would expect me to say that this is an internal management issue for local authorities. Of course, we will keep the matter under review as a national Government, but we cannot, and the hon. Gentleman would not expect us to, design a system centrally that would take into account specific concerns, whether about neighbour disagreement, estranged family or allegations of discrimination on whatever grounds. Local authorities of all parties would take such matters seriously, monitor them and interrogate management information to ensure that there are no such trends, or discrimination, and see that people do not take their personal disagreements into their business activity.

I hope that I have reassured the hon. Member for Inverness, Nairn, Badenoch and Strathspey that the triple protection would prevent the misuse of relevant medical evidence. I invite him to withdraw the amendment.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful as always to the Minister for his full response. Earlier in our proceedings, I mentioned the importance of advancing ideas about allowing medical assessments for one benefit to inform assessments for others, to get a more efficient system of medical assessments from the claimant’s point of view—so they were not called for multiple assessments. I understand the Minister’s point about the importance, in certain circumstances, of allowing the relevant evidence to be shared. The Minister’s remarks in respect of my concerns about confidentiality have given me a considerable degree of reassurance. I beg to ask leave to withdraw the amendment.

Tim Boswell (Conservative, Daventry)

You will recall, Mr. Hood, that there was some reference to theology this morning. In view of my contribution this morning, I can only pray in aid St. Augustine, who I think advised the sinner to sin boldly, but always remain conscious of the presence of his redeemer. As I spectacularly misapplied my remarks on clause 38, I hope that it will be in order if I reiterate—

David Ruffley (Conservative, Bury St Edmunds)

Does my hon. Friend agree that the Augustinian prescription, “Oh Lord, make me simplify, but not yet”—might be an accurate description of Government Ministers’ approach to simplifying the benefits system?

Tim Boswell (Conservative, Daventry)

I am sure that even Government Ministers may look forward with at least some qualified assurance to the possibility of salvation, but I agree with my hon. Friend that they have not yet reached that state of bliss.

Anne McGuire (Labour, Stirling)

If the Conservative party wished to adopt a saint, perhaps the appropriate one would be St. Jude, the patron saint of lost causes?

Tim Boswell (Conservative, Daventry)

The hon. Lady has now succeeded in fulfilling my expectations. I ought to resist further invitations, but perhaps I could suggest thatSt. Anthony of Padua, the patron saint of those who find lost items, might be a little more appropriate? We have found some principles that have perhaps been downplayed over the years. The only substantive point that I wish to make is that what I said this morning was timeless rather than pointless. The problem this morning was that it was clauseless. I now think that we have found a clause on which to hang it, and I hope that the Ministers will respond accordingly.

Adam Afriyie (Conservative, Windsor)

I am pleased to rise to speak to clause 40 stand part. It is the first time that I have led on a particular clause under your chairmanship, Mr. Hood, but I have observed, during former proceedings, that your guidance is often robust—so I am slightly nervous—but always useful and helpful in steering newer Members.

Clause 40 relates to the sharing of more information between more bodies. In particular it extends the parties that are able to view information from claimants or customers to county councils, between local authorities, with third parties to whom a local authority or the DWP are subcontracting, and between the DWP and various other parties. In the notes and several other documents that I have read, including the Green Paper, the line is that the purpose of this clause is to promote the take up and delivery of benefits.

I am sure all Members will agree that the sharing of information can often lead to greater efficiencies and we all see greater efficiency in the delivery and take up of benefits. But we must also be careful to balance the privacy of claimants and sometimes the security of claimants against that desire for greater efficiency. Of course greater efficiency is what we want and to some degree the entire Welfare Reform Bill pushes towards greater efficiency—both in getting people into work and in the allocation of benefits.

The points that I would like briefly to raise concern the security of data and the relevant purpose. Some experience has come through from the pathways to work pilot schemes. There must be some evidence or experience there about whether the requirement for further data sharing was necessary. I am happy to take interventions on the way if the Minister feels that he wishes to answer the point quickly because I simply do not have the information that he has available.

There must be some evidence that additional data-sharing powers were required. If those additional data-sharing powers were not part of the pathways to work pilot scheme, what impact did that have? Did it have a significant impact? Are these new powers of data sharing absolutely necessary in improving efficiency?

With regard to civil liberties and privacy and, in some cases, the security of individuals I have a general question. I believe that around 400,000 civil servants would generally have access to this kind of area, but does the Minister have some figures on how many additional civil servants and, more precisely—or more importantly—how many additional sub-contractors to the DWP or to local authorities or county councils might have access under these data sharing arrangements?

I will not run through sections 7A or 7B, which were created in the Social Security Administration Act 1992, in detail other than to say that it is very clear that third parties now obtain access to information, which is a concern. What vetting procedures does the Minister anticipate will be used to select employees among third parties to access the newly shared data? That is a key question.

We have already run through the concerns, under amendments Nos. 168 and 169, about an individual being related to someone who is making a claim and the effects that that can have. What safeguards are in place for employees accessing the system as employees of third party contractors?

The relevant purpose for use of information is to be set out in the regulations. It was very helpful to see a set of draft regulations beforehand; I have had a quick scan through and am comfortable with the direction that many of them take. I seek some reassurance though: proposed new section 7B(3) says that a relevant purpose for the sharing or use of information is

“any prescribed purpose which relates to a claim which is made or which could be made for a specified benefit.”

My concern is about the wording

“a claim ... which could be made”.

I am sure that it must have something to do with the technicalities of drafting legislation, but I seek reassurance. To my mind, as a layman, it seems that that would enable the sharing of absolutely everybody’s information, because a claim may be made by any citizen at some point in the future. Somebody may suffer a bereavement or a relapse of a mental health issue and make a claim. Somebody may make an inquiry about a benefit with no intention of taking it up. I have done so myself on behalf of a relative who was suffering from Parkinson’s disease.

Tim Boswell (Conservative, Daventry)

Would my hon. Friend also like to reflect that making a claim is, by definition, different from being in a position in which one might make a claim? In the first case, in making a claim, one implies acceptance of the rules of the scheme under which that claim is made, whereas in the second case, one has made no commitment at all.

Adam Afriyie (Conservative, Windsor)

I thank my hon. Friend for making the point crystal clear. This is why my concern is with the wording

“or which could be made”

in respect of a specified benefit: a claim is not actually being made at that stage. What reassurance can the Minister offer that there is not a free-for-all in the distribution or use of anybody’s information, whether they have made a claim or not?

In order to promote the take-up of benefits so that a form for a particular benefit is populated from information that is contained locally—there is a good example in the explanatory notes, or possibly in the regulations—surely some sort of budget would be required. If the intention is to extend the promotion of benefits, additional money will need to be spent. Will the Minister say a few words on where that additional budget is expected to come from? Will the local authorities be expected to come up with it, or will it be the DWP centrally?

Finally, we had a full and frank debate about the use of sanctions when we discussed previous clauses. I have noticed that financial sanctions will come up again in later clauses, together with prosecutions, investigations and yet more financial sanctions. If we are to feel certain that the purpose of clause 40 is to promote the take-up and delivery of benefits, as opposed to introducing a mechanism for imposing sanctions on offenders or for sharing information so that more prosecutions and investigations can be undertaken, the Minister must reassure us and rebalance the equation in his response. Will he explain where the promotion of benefits comes into the clause in budgetary terms and say something about the fact that the promotion of benefits is not mentioned in the regulations or anywhere else other than in notes and the Green Paper, and then as an intention?

Overall, the Bill is to be welcomed. If the clause does what it is purported to do, it will clearly be welcome. We all want greater efficiency so that more resources reach the claimants, but I hope that the Minister can give us some reassurance on the two or three points that I raised.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I will not dwell on the comments made by the hon. Member for Windsor. He raised many of the points that I was seeking to raise, so I will be brief.

It was important to say, as the hon. Gentleman did, that the provisions for information sharing will be welcome if what they lead to is more efficient benefit processing and a greater ability for services to be joined up for claimants, so that their experience is more straightforward and benefits decisions can be taken more quickly. I think it was important to preface my comments in that spirit.

Tim Boswell (Conservative, Daventry)

May I put to the hon. Gentleman the converse? Individual officials, for whatever motive, may embark on what lawyers would call a fishing expedition, trying to find out information that may or may not be relevant to the case or to other matters with which they may have to deal, or which possibly cast aspersions on a claimant that are entirely irrelevant.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

The hon. Gentleman makes an important point and I hope that the Minister will find time to address it in his response. The powers have to be used responsibly—not in the way that the hon. Member for Daventry described, as a kind of fishing expedition. They should be used to make inquiries in a proper sense.

I shall raise one additional matter that has not been mentioned in the course of the debate. Will the Minister address the issue of how the provisions might, in due course, interact with the national identity register and the national identity card, a benighted project—[Interruption.] The Liberal Democrats have opposed the project on a range of grounds that I do not propose to dwell on now.

David Ruffley (Conservative, Bury St Edmunds)

I do not know whether the hon. Gentleman heard the Minister saying “sainted” from a sedentary position, but does he agree that it would be a complete miracle if the scheme came in on time and on budget?

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

It would be a miracle of saintly proportions if that happened.

One of the arguments that Ministers advanced in support of that misbegotten and misconceived project was that it would make it easier for members of the public to access public services. The realm of public service that we are debating is access to benefits and access to support from the welfare system. My concern is the extent to which the provisions in the clause will allow information that is held for social security purposes, including medical evidence, although not medical information—a distinction drawn earlier by the Minister—to be linked into the national identity register to enable claimants to access public services. They may be using a national identity card to identify themselves. Could that information end up being stored on the national identity card, supposedly for reasons of administrative convenience? I hope that the Minister can give me a categorical reassurance that there will be no interaction between the social security information that we are debating and the national identity register, and that there is no possibility whatsoever that such information will be stored on the national identity card.

Kali Mountford (Labour, Colne Valley)

I served on the Standing Committee for the identity card Bill on both of the occasions on which it went through Parliament and I do not recognise any of the scenarios that the hon. Gentleman has described.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the hon. Lady for that intervention. I hope that the Minister will be able to give me similar reassurances about how the Government intend to make use of the provisions that we are debating. The Minister is a reassuring presence on this Committee, and I am sure that he will carry out that role effectively, as he has done before. I am concerned about the issue, and I hope that he can give me the categorical reassurance that I seek.

Jim Murphy (Labour, East Renfrewshire)

I shall try to respond relatively briefly, because I know that we are encouraged to make progress to clause 52 by whatever time of evening or night we manage to get there. Generally, my view on information sharing is that we need to go further in shaping public services around the needs and experiences of individuals, and learning from some of the experiences of the private sector. As I have said before, we should be intolerant of the state’s oft-repeated requests for the same information for similar purposes on consecutive days. I give the example of a part-time worker who is a mother who drives to hospital for her appointments. The state interacts with that citizen in all sorts of different ways: as a mother, a patient, a driver, a worker, a taxpayer, and somebody who might be receiving tax credits or the national minimum wage. We say that the state collectively does not do enough to communicate and interact with its citizens as rounded citizens; we can have a series of transactional relationships that do not in any way match up. There can be convenience for the citizen and efficiency for the state in the way in which we interact and transact with our customers.

Turning to some of the points that have been raised, I do not want to rerun the conversations that we had on earlier amendments, and I am sure that you would not encourage me to do so, Mr. Hood. However, on the point made by the hon. Member for Daventry and others about a “fishing expedition”, we are protected against such expeditions by guidance and staff codes as well as by wider human rights safeguards.

The hon. Member for Windsor asked how many additional civil servants would have access to the information. I know that figures are sometimes difficult to ascertain, but the advice here is that it is a round figure and it is nil. I hope that that reassures him. There are other figures of course. The clause extends the ability to share the information to English county councils, and I do not have a figure for that. I do not think that it is a matter of principle; it is a question of information. However, if the hon. Gentleman feels passionate about the issue, I am happy to follow it up with him.

Adam Afriyie (Conservative, Windsor)

The third of my questions was the most significant. The key question was, how many third parties will have access to the information?

Jim Murphy (Labour, East Renfrewshire)

I think that I am correct in saying—but if I am not, I shall clarify the matter for the Committee—that the number will be similar to that of the additional civil servants. This is about extending the current ability to share information to staff of English county councils. If I am in error about the extension of the number of third parties—particularly in the context of the city strategy, which we seek to roll out, or of joint working and joint outreach teams of the type that I alluded to in the east end of Glasgow and part of Liverpool—I shall, of course, stand corrected.

If I am in error about the extension of the number of third parties—particularly in the context of the city strategy, which we seek to roll out, or of joint working and joint outreach teams of the type that I alluded to in the east end of Glasgow and part of Liverpool—I will, of course, stand corrected.

Tim Boswell (Conservative, Daventry)

I am grateful to the Minister for having spoken—as we have said, the hon. Gentleman is a reasonable person. I am not seeking to force heat out at this stage of the proceedings, but it is implausible to say that the Government are about to share more information with relevant people and then, in the same breath, to say that no one is going to benefit from receiving that information other than those who already have it. Those two propositions are difficult to reconcile. Will the Minister of State reflect on that? I am not asking for a pat answer now. Will he come back to us and say, “Yes, we need to expand the constituency people who have access to that information. That is what we need to do and these are the safeguards.”? We will then be ready to accept it or at least listen to it. At the moment, he is imagining two impossible things together before dinner. He needs to revise his ability to ride both those horses simultaneously.

Jim Murphy (Labour, East Renfrewshire)

I will take up the hon. Gentleman’s invitation. As I said, if I am in error, I will enlighten the Committee about the specifics. Is it St. Luke who isthe patron saint of light? The provision concerns the greater use of information rather than its sharing. The clause provides an extension of that opportunity to English county councils. I confirm again to the hon. Gentleman that third parties will not have wider access to information under clause 40. However, I will respond, in a technical sense, to his specific points.

The additional points raised by the hon. Member for Windsor alluded to the breadth of the power to make regulations. Clause 40, as with other clauses, gives the Secretary of State a relatively broad power to take into account changes in the benefit system, the changing nature of the welfare market, changing pressures, the shape of the labour market, the need to adapt to the opportunities of information technology, including those in the future, and the changing relationship between the private and voluntary sector and the welfare market. It is important to give that broad power to the Secretary of State. We will state that in more detail, in regulation and guidance, before implementation.

Members of the Committee will have an opportunity to offer their reflections on the draft regulations before the Committee and state whether we have got them exactly right. For the first time in this Committee, I offer to write to hon. Members if I have not got the numbers exactly right. Neither myself nor my hon. Friend the Under-Secretary of State enjoy doing that. I think that we have written once to Members during our entire deliberations. However, if necessary and for the first time in our proceedings, I will write to the Committee. With that, I encourage the Committee to let the clause stand part of the Bill.

Clause 41

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to move amendmentNo. 145, in clause 41, page 34, line 35, after ‘function’, insert ‘prescribed by the Secretary of State’.

Jimmy Hood (Labour, Lanark and Hamilton East)

With this it will be convenient to discuss amendment No. 146, in clause 41, page 34, line 41, after ‘function’, insert ‘prescribed by the Secretary of State’.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I do not need to detain the Committee for long on the amendments. They probe a simple point. I know that clause 41 is trying to do something slightly different from clause 40. It is about making provisions relating to the sharing of information for a specific purpose. The explanatory note covers supporting people grants. However, I want to probe the relatively loose use of language under paragraphs (d) and (g) in subsection (4), although I am sure that there is an intention behind it.

Incidentally, I am delighted to see the temporary promotion of the hon. Member for Colne Valley. I hope that, given her contribution to the Committee, that will soon be made permanent.

The clause refers twice to a person authorised to exercise “any function” of such an authority relating to housing benefit. The phrase “any function” is broad and I want, through the amendments, to probe what the Government mean by it. I look forward to the Minister’s response.

Jim Murphy (Labour, East Renfrewshire)

I am not sure that I have the confidence or the courage to share with my right hon. Friend the Secretary of State for Defence the information that the position in Committee of my hon. Friend the Member for Colne Valley is a promotion from her role as his parliamentary private secretary. However, the hon. Gentleman might wish, in a quieter moment, to offer that observation to my right hon. Friend.

Protection under subsection (4) is set out in terms of the appropriate person. As the hon. Gentleman is aware, draft regulations 125 to 128 set out the legitimate purpose. At present, it is up to local authorities to provide for the delivery of such services in the manner that best meets the needs of the communities they serve. The amendment would unnecessarily involve the Secretary of State in that local authority role and matter. Although the phrase applies to a person authorised to perform any function, the sharing can take place only for a relevant purpose in respect of housing benefit and welfare services. I hope that the relative narrowness of the power will reassure the hon. Gentleman.

The clause already contains adequate safeguards to ensure that only appropriate persons are involved in the information sharing. In particular, any information sharing under the clause would need to be for the legitimate purpose of either applying a welfare service grant or for a welfare service housing benefit purpose prescribed under the regulations. Only those persons whose functions relate to such purposes can be involved in the information sharing, so there is no need to be more specific about the persons involved.

Section 123 of the Social Security Administration Act 1992, which I have alluded to, and clause 42 of the Bill would also make any unauthorised disclosure of information made by a person authorised to exercise a housing benefit and welfare service function respectively a criminal offence. That reassurance is important. However, if the hon. Gentleman has specific worries, he can allude to them when referring to the draft regulations before us or do so in later proceedings. I encourage him gently to consider withdrawing the amendment.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the Minister for his encouragement to comment on the draft regulations, which I shall be keen to do in due course. I am aware of his previous implication that now is the time to debate not draft regulations in detail, but more the principles of clauses. However, I am now reassured about matters—although that it not always the case. I beg to ask leave to withdraw the amendment.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I beg to move amendmentNo. 147, in clause 41, page 35, line 22, at end insert—

‘(10) A person who is the subject of information that has been supplied in accordance with subsection (1) shall be notified in respect of—

(a) the information provided, and

(b) the person to whom that information has been given.’.

This amendment requires slightly more substantial debate because it relates to the rights of the claimant.

Jim Murphy (Labour, East Renfrewshire)

The customer.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I hear the Minister say “customer”, so I will use the new Labour terminology for the remainder of the debate.

David Ruffley (Conservative, Bury St Edmunds)

And Conservative.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

Yes. There is a sort of unity here. We are all customers of the modern Conservative party.

The amendment would add to the Bill the obligation that, when information is shared under clause 41, the

“person who is the subject of information that has been supplied...shall be notified in respect of—

(a) the information provided”—

the nature of that piece of information—

“and

(b) the person to whom that information has been given.’.”

Members of the Committee may have observed that such an amendment might have been appropriate also under clause 40—indeed it might have been. However, the amendment seeks clarification from the Minister on the rights he envisages customers having to knowledge and information about them, which they might have supplied to an agency or Department, such as their local authority, and which might then have been shared with another Department. On the face of it, it would seem to me reasonable, on the grounds of basic fairness, that that claimant should have the right to know that information about them has been shared, the nature of that information and with whom it has been shared.

Given the volume of correspondence with which customers almost inevitably are burdened during the course of their interactions with the relevant Departments, I cannot see an argument against my proposal on the grounds of administrative efficiency because there is regular correspondence in any case. On the grounds of natural justice and fairness, it seems reasonable that if information about me is being shared, I should be made aware of what that information is and with whom it is being shared. I look forward to the Minister’s response.

Jim Murphy (Labour, East Renfrewshire)

Again, briefly, the hon. Gentleman’s intention is of course a fair one, but he seeks to solve a problem that I do not think actually exists. In doing so he would set up a series of inappropriate and unnecessary bureaucratic hurdles that would run entirely contrary to what the Government are seeking to do in many other ways—occasionally we have his party’s avowed support, but only occasionally—in order to lighten the bureaucratic burden on public servants, businesses and customers. Instead, he wants to create an entirely unnecessary set of bureaucratic hurdles to the processes that we are seeking to put in place.

Amendment No. 147 would place a duty on welfare services and benefit teams sharing information under subsection (1) to inform the customer whose information is being shared what information is being shared and with whom it is being shared at each and every stage in the chain of events as that information is received by those in the welfare system who wish to support them. If I understand the hon. Gentleman’s amendment correctly, that information, as well as a request for information to be shared and the fact that it is being shared, would have to be confirmed in writing with each customer. I do not think that that is an appropriate way to handle the situation. We are trying to introduce a system that will remove bureaucracy, reduce the number of repeat requests and lighten the load created by complications, which would be welcome. The hon. Gentleman has a good purpose and reasonable concerns, but the outcome of what he has designed would add to the bureaucratic burden and complexity of the system. That is unnecessary and unwelcome.

In any case, information sharing under the clause is subject to the usual data protection principles. It is important that that is put on the record. In particular, those principles provide already that the sharing proposed should be foreseeable to the customer. In practice, that involves the customer being told of the use to which their personal information could be put when they supply it.

Adam Afriyie (Conservative, Windsor)

I seek a little further reassurance before relaxing on the point. The Data Protection Act 1998 is very clear. My background is in IT services and I understand the principle that a person opts into rather than out of data sharing. Will the Minister confirm that when a customer acts as a claimant by making a claim, they opt in by physically signing to say, “Yes, you can share my data.”? Is that the situation regarding benefit claimants?

Jim Murphy (Labour, East Renfrewshire)

I am at a bit of a disadvantage, in that the hon. Gentleman used to be an IT consultant but I only used to be the local e-government Minister. Our conversation on the Bill can sometimes be pretty dry, but if we were to enter into a conversation on the nature of the relationship between the state and IT and how we use our IT, I am sure that it would be a dialogue involving only two.

The customer would be aware at the outset of the types of organisation that would use the information and the purpose for which the information would be deployed within the welfare realm and shared to make their navigation around the system much easier for them and those who advocate on their behalf.

Tim Boswell (Conservative, Daventry)

I am grateful for the assurances that the Minister is offering to the Committee. I did not want to speak at length because I am conscious that this is an intervention, but since yesterday, when somebody ran into my car—it was not my fault—I have been somewhat preoccupied with having to deal with claims. It has been interesting. I have had to duplicate information for different bits of the responsibility—picking up the excess and so on—which I concede is irritating. However, I have also been struck by the way that those with whom I have been dealing—exclusively on the telephone and not documentarily—have said right up front, “At this point you are making a return, and the information is personal information that you may or may not be disclosing under Data Protection Act principles.” It is absolutely up front and explicit. We are all anxious for the Minister to ensure that at some point, in training, through explicit notice in scripts for telephone information downloading, or on documents filled in by claimants, it is made clear that the information has a purpose and may be used within the proper principles of the Data Protection Act 1998, so that there need be no doubt. No corner-cutting should take place.

Jimmy Hood (Labour, Lanark and Hamilton East)

Order. May I say to the hon. Gentleman that that was a rather long intervention, and I hope that it is his last long one?

Jim Murphy (Labour, East Renfrewshire)

Listening to the hon. Gentleman, I was under the impression that I had finished my comments.

Tim Boswell (Conservative, Daventry)

Start again.

Jim Murphy (Labour, East Renfrewshire)

I will not take up the hon. Gentleman’s encouragement, but I will say in closing—it relates to his point and experience and to that of the hon. Member for Windsor—that any person who supplies information to DWP or local authorities will be given a fair processing statement explaining to what uses the information will be put. In addition, all guidance issued by the Department on the use of the power will be freely available to anybody who wishes it. Similarly, and importantly, anyone can request from local authorities involved in sharing information documents that set out their policy on the matter under the Freedom of Information Act 2000. I hope that with that important reassurance, the hon. Member for Inverness, Nairn, Badenoch and Strathspey will be inclined to withdraw his amendment.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I am grateful to the Minister for his response. I am so inclined, and I beg to ask leave to withdraw the amendment.

Adam Afriyie (Conservative, Windsor)

I am conscious of time, so I will be as quick and to the point as I can without being peremptory. The clause relates to sharing information on certain benefits under the supporting people framework, which is a funding mechanism for giving money to vulnerable or needy groups in society.

The clause aims to ensure that the information available on grants given by other mechanisms is available to the people administering employment and support allowance and other benefits under the Bill. I am aware that the Local Government Act 2000 makes it an offence to share information other than in relation to a very narrow category of benefits. Clearly, something needs to change, and the clause is necessary if information is to be shared. However, as I said on clause 40 stand part, we must go no further than necessary when disclosing personal and private information to achieve efficiency.

I have two or three concerns about which I trust that the Minister will reassure us. First, the pathways to work pilots will already have had access to certain information through the supporting people framework. What impact did that have on how efficiently benefits were delivered under the new schemes?

My second concern, which is fairly significant, is about the powers being created under the clause. Subsection (9)(a) states that the power to make an order or regulations under the clause includes the power

“to make different provisions for different purposes”.

At a cursory glance, that seems to mean, in layman’s language, that the Secretary of State can make any provision for any purpose. I am sure that that is not the case, but will the Minister explain where in the Act the power is checked or contained?

My third concern is about the definition of welfare services, which is key to the clause and to the sharing of information under the clause. The definition at the end of subsection (10) is fairly vague. It states that welfare services include

“services which provide support, assistance, advice or counselling to individuals with particular needs.”

I hope that that is covered in the regulations, because it does not take a large leap in imagination to realise that pretty much any support service that is provided to any individual could be considered to fall within that grouping. I would like some reassurance that that broad—indeed, vague, from a layman’s perspective—definition will be dealt with in the regulations. If I have misunderstood the legal language, will the Minister explain where I have misunderstood it?

Access to the draft statutory instrument relating to clause was very welcome because it makes it clear how orders and regulations will be made and gives us the shape of the instrument. That was useful in showing how complicated the benefits system is and how welcome parts of the Bill are in tackling some of that complexity.

In relation to the employment and support allowance and other benefits under the Bill, what was the experience of the pathways to work scheme with overlap and interaction between the supporting people framework and that funding mechanism? Was there any confusion? Were there any representations that the two are incompatible? Was there any trouble or rub-up between those two overlapping schemes?

Clearly, clause 41 needs to stand part of the Bill. If the Minister gives me the reassurance that I seek, I will be comfortable in accepting it as it stands.

Jim Murphy (Labour, East Renfrewshire)

I shall respond relatively briefly to the specific points that have been raised. As hon. Members will know, the clause will replace section 94 of the Local Government Act 2000, to which the hon. Member for Windsor referred. Section 94 allows only a one-way sharing of benefit information from benefit teams to welfare services teams for purposes connected to the application of welfare services grants. Clause 41 will make that one-way gateway into a two-way sharing provision, which is important.

On a point raised by the hon. Gentleman, the same definition of welfare services will apply as under the 2000 Act. We are not redefining welfare services in this clause. That is an important reassurance, and I know that he will take it as such. We are simply continuing and extending the sharing that is already in place.

On pathways and, as the hon. Gentleman put it, the possible rub-up between schemes, I have pathways in my own area and, as a constituency Member of Parliament, that is not something that I have noticed. Others might have their own experience, but we have already committed to the publication of the experiences and assessment of pathways. We will of course share them with the Select Committee on Work and Pensions, which will make its own observations on the neatness of the fit between pathways and other DWP programmes, whether they are provided by the state or enabled by the private and voluntary sector.

The hon. Gentleman was right to allude to the complexity of the benefits system, the welfare market and labour market interventions. As we seek more collaboration between the public sector and the private and voluntary sector and use the opportunity that technology provides, collaborative work will become much more commonplace and will be welcomed more by ourselves and, more importantly, by our customers. Two-way information sharing is crucial to enable that to happen.

The hon. Gentleman asked earlier about the cost of enabling the provision. We do not have an identified set of costs, because we are not putting an additional statutory obligation on local authorities. It is important to point that out to our local government colleagues. We anticipate that as a consequence of information sharing, there will be significant savings and a reduction in duplicate requests for information from the same customer. That is all that I can say on costings at this time.

Tim Boswell (Conservative, Daventry)

In cases in which the local authority assumes the burden of administering a national benefit, will there be provision for the reimbursement of the local authority, either through the normal local government formula or by way of a special acknowledgement of its work? It is clearly important that such work is done as efficiently as possible, and that the costs should be met if they are disproportionate. For example, if a ring of fraudsters is operating in a particular local authority area and the authority has to do a lot of extra work, who will pick up the tab?

Jim Murphy (Labour, East Renfrewshire)

The hon. Gentleman raises an important principle, which he knows is exercising the Government. I shall put it in the context of the conversation that we are currently having in Parliament and elsewhere about how properly to devolve the welfare state and how to incentivise good behaviour and ambitious thinking and delivery. In the private and voluntary sector there is a well established procurement process, identified in contracts, and risk and rewards. That is set out in pathways and in other private and voluntary sector support.

How to incentivise local authorities is an important conversation and the truth is that we have not got it right over time. One of the problems by which we are currently taxed is city strategy. As we heard yesterday at departmental questions, the fifteen city consortiums are to put their proposals to the Government by29 December. Within that context, the question is how properly to reward those who go beyond the norm in progressively supporting people to get off benefit and into work, so that they can retain some of the savings for investment in subsequent success. We are alive to that principle. We acknowledge that over time, Governments of all persuasions have not gone far enough or come close to getting the right rewards in the public sector, particularly in respect of local authorities. We are determined to address that in our city strategy.

Adam Afriyie (Conservative, Windsor)

My final point was about the wide-ranging power in clause 41(9)(a) to make different provisions for different purposes.

Jim Murphy (Labour, East Renfrewshire)

I apologise to the hon. Gentleman for not having alluded to his specific question. What we seek to do there, as in other clauses, is to draft quite a wide power and then follow it up in regulations or guidance, whichever is most appropriate. Draft regulations in relation to the clause have been provided. The alternative to taking the relatively broad power is to set out in primary legislation a rather prescriptive definition of the purpose.

Welfare reform Bills do not appear annually. We cannot rely on the flow of primary legislative vehicles to continually update the Government’s interventions in a changing welfare market. That is why we take a relatively broad power which we can follow up with regulations or guidance. The House and others will take a view so that we get those regulations and guidance absolutely right. To place on the face of primary legislation a specific constraining power would mean that the primary legislation would be pretty quickly out of date and unable to adjust to the changing nature of the welfare market.

Adam Afriyie (Conservative, Windsor)

The reason that I make the observation is that on a cursory glance through other legislation passed in the past five to 10 years, I could not find an identical phrase or the same structure of comment. That was why I raised the concern. Perhaps at some other point the Minister may allude to it again.

Jim Murphy (Labour, East Renfrewshire)

That is an important point. Perhaps later in our deliberations we can return to that. We have taken similarly broad powers in earlier clauses. I cannot recall the exact phrasing. I think we had a Division on one earlier. That the Secretary of State should have a power to vary provisions because of the changing nature and changing circumstances of the labour market and the welfare system is an important and well-established principle.

We can discuss the points raised by the hon. Member for Daventry about the issue of fraud and specific efforts by local authorities at a local level when we come to clause 45. I do not want to entice the hon. Gentleman to prolong his point, but there will be an opportunity to do that then. With those comments, I encourage the Committee to agree that the clause stand part of the Bill.

Clause 42

Adam Afriyie (Conservative, Windsor)

I want to make two or three brief points. The clause appears to bar the unlawful disclosure of certain information by people involved in the use of the information. Essentially, it aims to stop the unlawful disclosure of information when disclosure is probably enabled by the previous two clauses. The third party organisations and private companies that may be employed in the use of information and the delivery of welfare services will clearly have access to the information. I seek some reassurance on the controls on the employees of those third party organisations. Will criminal record checks be compulsory? I should like some information on the vetting of employees in third party organisations to which services may be contracted out.

This is a “techy” point, but I am curious to know the difference between clause 42 and section 123 of the Social Security Administration Act 1992, which it clearly seeks to reflect. If there are any differences, what is the reason for them?

My final question is on budgets. It is intended to promote take-up, but the clause says that it will be unlawful to disclose information. Inquiries and monitoring will incur costs, so from which budget will those costs be paid? I appreciate that the costs will not be significant or enormous, but will they be paid by local authorities, third party suppliers, or the DWP?

Jim Murphy (Labour, East Renfrewshire)

Clause 42 is needed to align existing protections against unauthorised data sharing in relation to benefits staff and local government. The hon. Member for Windsor said, rightly I think, that the clause replaces section 123 of the Social Security Administration Act 1992, which applies to benefits staff, and section 95 of the Local GovernmentAct 2000. The clause creates a criminal offence of unauthorised disclosure by welfare services staff of information gained through clause 39, which is headed “Information relating to certain benefits”. Conviction for the offence may lead to a fine or, importantly, imprisonment.

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I assume that, when the Minister referred to clause 39, he meant clause 41, because the Bill has been renumbered.

Jim Murphy (Labour, East Renfrewshire)

The hon. Gentleman is right, and he encourages me to mention that the wording of the draft regulations and supporting material will also need to be updated, because having been published in October they predate the additional clauses.

To address the point made by the hon. Member for Windsor, subsection (2)(a) covers third party employees—parties employed by local authorities. It is up to the authorities to conduct appropriate checks on staff. Hon. Members were keen to see the paperwork that we compiled on the roles of the private and voluntary sectors in future pathways, and will now have had chance to reflect on it. In drafting that paperwork, we dealt with staff training, staff experience and keeping staff skills up to date, and we wanted to ensure that people will be supported in getting back into the labour market by appropriate staff with appropriate experience and relevant backgrounds.

On the hon. Gentleman’s narrow, technical question on clause 42, I am advised that the narrow, technical answer is that there are no differences between the clause and section 123 of the 1992 Act in what constitutes unauthorised disclosure. I hope that the reassures the hon. Gentleman.

Adam Afriyie (Conservative, Windsor)

I appreciate the Minister’s generosity in giving way, but I just want to be absolutely clear that third party contractors will not be required to conduct criminal record checks on their employees, and that consideration of what is appropriate is in their hands. That rings a few alarm bells with me.

Jim Murphy (Labour, East Renfrewshire)

The hon. Gentleman can return to the discussion on private and voluntary sector contracting and so on in the light of the paperwork that the Government have provided. He is correct in saying that we will not centrally stipulate the criminal record checks to be performed on third parties. We can return to that issue on another occasion.

The protections provide citizens with assurances that information that may be personal and private, which they supply to those administering social security, will be treated in strictest confidence and will be only be disclosed to others in limited circumstances. I have described a triple protection mechanism. I hope that for the hon. Gentleman, who has been listening avidly to my comments, those last few sentences reassure him about his very real concern that started the alarm bells ringing. With that, I encourage the Committee to agree that the clause stand part of the Bill.

Clause 43

Adam Afriyie (Conservative, Windsor)

I want to make a couple of comments about the recovery of overpayments. The hon. Member for Inverness, Nairn, Badenoch and Strathspey covered this territory earlier, and it is uncontroversial to say that if an overpayment is made, it should be recovered. However, I have two concerns. With the changes to the Social Security Administration Act 1992, an overpayment that is due to a banking or processing error by the local authority or whoever makes the payment will automatically be reclaimed without a new decision confirming that an overpayment was made. Somebody who is a couple of hundred pounds overdrawn, who continues to spend, as most people do, and who does not spot the overpayment will be put in a difficult position if the money has to be returned immediately. They are already in a difficult financial position, by virtue of the fact that they claim those benefits. I want an explanation of how the new power to reclaim an overpayment immediately will impact on the least well off in society—those who claim benefits.

Tim Boswell (Conservative, Daventry)

Does my hon. Friend agree that as more benefits are paid automatically into bank accounts, for reasons that we have rehearsed in other places, overpayments will become less obvious to the claimant? For example, my winter fuel payment status has changed during this month. I have no idea whether the Department has succeeded in paying my wife and myself, or only myself or whatever. I shall find out by the end of the month, and if anything is wrong, I shall rectify it. However, I cannot do so immediately. Many people in that position may continue to pay up until they run out of cash in their account.

Adam Afriyie (Conservative, Windsor)

My hon. Friend clearly illustrates what may happen, and I accept his point entirely. With many benefits paid into a single bank account and with many direct debits and other demands on people’s accounts, an immediate reclamation without a decision on an automatic payment made to a claimant could cause great difficulty.

The clause also says that the Department or the paying body will be able to reclaim an overpayment when somebody has misrepresented the information that they provided. Of course, if somebody has deliberately misrepresented the information that they have provided in order to obtain a short or long-term benefit or payment, that is unacceptable and it should be dealt with appropriately through an immediate repayment. However, will the Minister of State assure the Committee that where someone who has dyslexia, which many of my friends struggle with to a certain degree, or a learning difficulty accidentally writes one wrong figure on a form, there will be a safeguard to ensure that they will not be immediately penalised and treated as if they had participated in a gross misrepresentation?

Having voiced those two concerns, which I trust the Minister of State will be able to address, I am happy to sit down.

Jim Murphy (Labour, East Renfrewshire)

We are making deserved and popular progress, so I shall not seek to delay the Committee. Clause 43 is headed, “Recovery of overpaid benefit: Great Britain”. It might help the Committee if I confirm that the clause seeks to codify what already occurs in practice. No one will be affected in a material sense by the power we are taking in the clause. The issues that the hon. Gentleman reasonably raises as concerns are already dealt with in practice. The clause ensures that there is no ambiguity in the legislation about the processes for determining and recovering overpayments of benefit when they are paid through the banking system. Social security commissioners have said that this aspect of our legislation is unclear, and we are taking this Bill as an opportunity to put the matter beyond doubt.

An overpayment of this kind can arise, for example, when a benefit payment is issued through the banking system and a change in circumstances that reduces entitlement is properly reported by the customer after the time that we are able to recall the next payment, but before the payment enters the person’s account.

The clause does not remove the need for an award to be revised before an overpayment can be determined, as that is retained within new section 71(5A). However, it will enable us to review an award and then consider the recoverability question at a later date, allowing for a more considered approach to determining whether the overpayment is recoverable. The change follows a similar one in 1996, and simply ensures that benefit overpayments can continue to be dealt with as was always intended. Given the reassurances that the clause simply codifies current practice and removes any dubiety or lack of clarity identified by the social security commissioners, and notwithstanding the hon. Gentleman’s concerns about what already happens, I urge that the clause stand part of the Bill.

Clause 45

Anne McGuire (Labour, Stirling)

I beg to move amendment No. 68, in clause 45, page 37, line 30, at end insert—

‘(1C) An authorisation made for a purpose mentioned in section 109A(2)(a), (c) or (d)—

(a) is subject to such restrictions as may be prescribed;

(b) is not valid in such circumstances as may be prescribed.’.

I shall not detain the Committee for long, but given that the hon. Member for Daventry alluded to this in an earlier discussion, I thought that it would be helpful to clarify the amendment.

It might be of interest to the Committee to hear that about half the fraud against housing benefit also involves fraud against another national benefit. Current rules permit local authorities to investigate fraud against housing benefit and council tax benefit, but not to investigate fraud against any of the national benefits administered by the DWP. The clause remedies that and will allow local authorities to investigate fraud against national benefits.

Our intention has always been that we will balance the powers with safeguards. The safeguards will allow the Secretary of State to ensure that local authorities do not misuse the powers. We have discovered a technical problem with our ability to set out the safeguards in regulations, and the amendment will rectify it. The safeguards will include limiting the type of benefit offence that a local authority may investigate, allowing particularly difficult or sensitive cases to be withheld from local authority action, and withdrawing the powers in case of misuse.

On the specific issue that the hon. Gentleman raised, tackling local fraud activity is, and will be, funded through the general administrative subsidy. However, when we place a new burden on local authorities, funding will be linked to the new burdens principle. I hope that that reassures him and indicates why we need the clause.

Tim Boswell (Conservative, Daventry)

That does give reassurance, and I have no objection to the amendment.

Adam Afriyie (Conservative, Windsor)

It seems that a new power is being granted to local authorities to investigate national benefit fraud cases. My one key concern is that it seems that the Secretary of State can ask a local authority to conduct an investigation. Where will the budget come from if local authorities are to conduct investigations into national benefit fraud?

Anne McGuire (Labour, Stirling)

I thought that I answered that point when I answered the comment made by the hon. Member for Daventry. However, I shall have no problem repeating it. A local authority’s activity to combat fraud is funded through the general administrative subsidy. When we place a new burden on local authorities, we will provide funding according to the new burdens principle. I hope that that provides the clarity that the hon. Gentleman seeks and that he will support the clause.

Clause 46

Anne McGuire (Labour, Stirling)

I beg to move amendment No. 69, in clause 46, page 38, line 2, at end insert ‘unless—

(a) the proceedings relate to any benefit or circumstances or any description of benefit or circumstances which the Secretary of State prescribes for the purposes of this paragraph, or

(b) the Secretary of State has directed that the authority must not bring the proceedings,

and a direction under paragraph (b) may relate to a particular authority or description of authority or to particular proceedings or any description of proceedings.’.

Jimmy Hood (Labour, Lanark and Hamilton East)

With this it will be convenient to discuss Government amendments Nos. 70 and 71.

Anne McGuire (Labour, Stirling)

We are tumbling quickly to a conclusion this afternoon, Mr. Hood, and I thank you for that. During the debate on amendment No. 68, I spoke about the need for safeguards to prevent the misuse of local authorities’ new investigation powers by local fraud investigators. These amendments ensure that we have corresponding safeguards in place to prevent misuse of the new prosecution powers introduced in clause 46.

The clause will allow local authorities in England and Wales the power to prosecute fraud against DWP-administered benefits, which I have already mentioned. In Scotland, the procurator fiscal will be responsible for the prosecution of all criminal activity. The safeguards will include limiting the type of benefit that a local authority may prosecute and directing that authorities may not bring proceedings in certain cases. We require that local authorities have regard to the code for crime prosecutors when prosecuting in cases of national benefit fraud. We would also, as I indicated earlier, withdraw the powers in case of misuse. If the Secretary of State withdraws the powers, he or she may continue with any proceedings that have already been started or he or she may discontinue them. I am pleased to move the amendments.

Tim Boswell (Conservative, Daventry)

Briefly, I do not think that there is anything objectionable in principle here. It would be helpful if the Under-Secretary could share with the Committee any information that she has about anybody else who is empowered to carry out prosecutions in relation to benefit fraud on behalf of the DWP. Are there any such persons? Perhaps not. To extend the thought for a moment, in relation to those who provide support under pathways to work, will she assure the Committee that it is the Government’s intention, at least at this stage, not to award any prosecution powers to private sector providers and that the powers will be kept in-house in the Department, just like the decision-making process?

Anne McGuire (Labour, Stirling)

I am happy to pick up on the hon. Gentleman’s point. It might be helpful in case of misinterpretation of the new burdens to say that the Government do not anticipate that the clauses and Government amendments will impose any new burdens on local authorities. They are there for the sake of clarity, so that when central Government impose new burdens on local authorities, there will be a principle to deal with it.

Perhaps it might be helpful for the Committee to understand that we anticipate that the powers will create efficiency savings. They should result in an efficiency savings of between £450,000 and £600,000 each year for DWP and local authorities because of the reduced need to conduct joint investigations to comply with current legislation. As I said when I opened this debate, about half of housing benefit frauds are linked to other benefit frauds. It seems appropriate to link the two, albeit with safeguards in place.

The hon. Member for Daventry asked for a specific statement about whether other agencies will be able to prosecute. There will be no agencies other than local authorities and, as the Government said earlier in the Bill’s progress, it is certainly not our intention to award such powers to any private sector organisation. With that, I trust that the Committee will accept the amendment.

Clause 48

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I want to take this opportunity to probe the Government’s thinking on this change. In previous debates in this Committee in which we have discussed benefit sanctions or conditionality, I have been keen for information from Ministers about the evidence on which the proposed change is based.

As I understand it, the clause will extend from three years to five years the period in which benefit may be sanctioned or lost if a second benefit fraud conviction takes place. Will the Under-Secretary tell the Committee on how many occasions the power has been used since it was introduced with a three-year limit? When it has been used, on how many occasions has it resulted in benefit being withdrawn entirely, and in how many has benefit been withdrawn partially?

In the no doubt detailed assessment that the Under-Secretary and her officials carried out before proposing the change, in how many cases would the power have applied since it was introduced if the five-year time limit had been in place rather than the three-year time limit? It is important for the Committee to understand, looking back, what difference the extended power would have made in practice in evaluating the judgments that Ministers have made in advancing the clause. I look forward to her explanation of that evidence base.

Anne McGuire (Labour, Stirling)

It may not be possible to give the detailed analysis of the number of cases per year, for which the hon. Gentleman asked. However, I can give him some information, which I hope will be useful, on the number of cases that we anticipate, based on current trends. That may go some way to deal with the issues.

The clause is about deterring benefit fraud, rather than punishment. We are determined to tackle benefit fraud. When a person is convicted of a second benefit fraud within a specified period—we are asking the Committee to accept that the current period of three years should be extended to five—that allows us to reduce benefit entitlement or to remove it. The Department already uses that process to reduce benefit fraud, but it is especially aimed at deterring those who offend persistently and have been given repeated warnings to the effect that a further conviction would have an effect on their benefit. The current legislation works. We want to maximise the deterrent effect, without it running contrary to other legislation relating to re-offending, such as the Rehabilitation of Offenders Act 1974, under which some offences are spent after five years.

The hon. Gentleman asked for the number of cases that we would expect to capture by extending the legislation. We anticipate that, based on current trends, there will be somewhere between 30 and 50 additional cases per year. However, we should hope to see a reduction in the number of cases. If people realise that there could be a removal or a reduction of their benefit, that in itself will, hopefully, be a deterrent.

Tim Boswell (Conservative, Daventry)

The Under-Secretary is giving a satisfactory response to the queries that have rightly been raised. Will she confirm that there has been no historic difficulty with the three-year rule in respect of the Human Rights Act 1998 and that there have been no successful defences of the allegedly fraudulent claimant on the grounds that, somewhere, the process has been unfair? Bearing in mind that Ministers have given their certificate about compliance, will she confirm that a five-year period is within those principles? I have no difficulty with them.

Anne McGuire (Labour, Stirling)

The hon. Gentleman identifies specific circumstances where an individual may wish to pursue a case under human rights legislation. I assure him that the five-year period does not run counter to that. As my hon. Friend the Minister of State has said, the Secretary of State for Work and Pensions has made a statement under the Human Rights Act, which is at the front of the Bill.

I have talked about the cases that we hope to catch in future, based on our current analysis. Currently, there are 320 cases per year where two strikes have encouraged us to see whether there should be a sanction, and the sanction was applied in 190 cases. There are no details about how many people were in hardship or partial award. I hope that that is a satisfactory explanation for the hon. Member for Inverness, Nairn, Badenoch and Strathspey.

The penalty applied on the two-strikes cases will not change. I hope that that gives some comfort to the Committee. It remains a fixed 13-week period, during which a customer’s benefit ceases or may be reduced. It is not necessarily removed; it can be reduced. Most importantly—this links into what is behind the hon. Member for Daventry’s question about safeguarding rights—those first convicted of a benefit fraud will receive a written warning telling them about the two strikes provision. Therefore, people will be under no illusion: if they continue to defraud the benefits system there will be a penalty with the two-strikes approach. Any right of customers to request hardship payments will not change either. I hope that gives some comfort to the hon. Member for Inverness, Nairn, Badenoch and Strathspey.

These payments will help to ensure that the basic needs of vulnerable customers or those with families continue to be met. No deductions are made from retirement pensions, benefits paid for children, or disability living allowance, while an underlying entitlement remains to passported housing benefit and free school meals.

I hope that members of the Committee will appreciate that we are extending the time for very good reason. We want to root benefit fraud out of the system. We have also built in safeguards so that those who are vulnerable will have protection under the new system. Most of all, we will make clear to customers who have a tendency—as I say, we are talking about very small numbers here—to defraud the system what the penalties are for that action. With that explanation, I trust that the Committee will accept the clause.

Clause 49

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

I welcome the clause, but may I have some latitude, Mr. Hood, to probe a related matter briefly? This clause and clause 50 seem, on the face of it, to make improvements in respect of the conditions that relate to widowed mother’s allowance and widowed parent’s allowance in cases where the child is not resident with the parent. It seems broadly sensible to place that under the heading, “Benefits for bereaved persons”.

It has recently been drawn to my attention by a constituent that there is another matter relating to bereaved persons. I hope the Minister might be able to take that away and have a wee look at it: the conditions for entitlement to funeral grants where there is a sharp three-month cut-off point. If the claim is not made within three months, not only can there be no appeal, but the administrative rule is strict. I have recently had a local case where a claim has been refused after the three-month period, despite there being reasonable grounds for an appeal to be considered and a grant to be made. I hope that, with the leave of the Committee, the Minister will have a wee think about that and come back to me.

Anne McGuire (Labour, Stirling)

I thank the hon. Gentleman for his comments on both clauses 49 and 50, which are linked. He is right: it is an improvement on the current situation. The arrangement is to withdraw child dependency increases as part of the move to child tax credits. The exact provision had not been made, and we have used this Bill to tidy that up.

With regard to entitlement to bereavement grants and the three-month cut-off, if memory serves—a few of us here were around in the 1997-2001 Parliament—there was some debate of that issue at that time. It was accepted by the House that we should have a three-month period when the bereavement grants would be considered and after that there would be a cut-off. I will not give any definitive comment at the moment and I will get back to the hon. Gentleman about that particular issue.

Clause 51

Danny Alexander (Liberal Democrat, Inverness, Nairn, Badenoch and Strathspey)

Clauses 51 and 52 make provisions for people under 16 in relation to the care component of the disability living allowance and the mobility component respectively. Will the Under-Secretary give a brief statement as to the rationale behind the changes?

Anne McGuire (Labour, Stirling)

I welcome this opportunity to clarify the changes, which will be of particular interest to Committee members who are interested in the administration of the disability living allowance. Clause 51 removes an anomaly from the legislation governing the entitlement conditions for the care component of disability living allowance for people on or around the age of 16. The hon. Gentleman rightly points out that clause 52 is linked to clause 51—I hope that I am not going out of order here, Mr. Hood—and covers entitlement to the mobility element of the DLA.

The changes are principally to ensure that people on or around the age of 16 do not lose three months’ benefit entitlement. To be entitled to DLA, a person must have satisfied the conditions of entitlement for at least three months—the so-called qualifying period—and must continue to satisfy them for a further six months. That is the prospective test, because the benefit is for long-term conditions. Additional entitlement conditions apply to children under 16. A recent social security commissioner’s decision highlighted an anomaly in the legislation that meant that people on or around the age of 16 who claim DLA or an additional amount to an existing award could lose up to three months’ worth of benefits.

The clause modifies the normal conditions of entitlement for children under 16. It will principally mean that someone who is 16 or over who claims DLA or an additional amount to an existing award will be awarded the benefit if they satisfy the normal adult entitlement conditions even if part of the qualifying period falls before they were 16. Conversely, a child who is under 16 will have to fulfil only the additional conditions that are applicable to children up to and including the day before their 16th birthday.

The clause does not change the entitlement conditions for adults or children. It simply ensures that the entitlement of people who claim on or around their 16th birthday will continue to be decided in the way that existing legislation intended. This is a situation in which the law was not quite in balance with the original policy intent, and we have taken this opportunity highlight the anomaly and to clarify the legal position. I welcome this opportunity to explain the changes because it will make a difference to young people who need to claim DLA and will prevent the cliff-edge effect that sometimes happens in the benefit system when a young person goes through the legal transition from childhood to adulthood.