Draft Civil Legal Aid (Merits Criteria and Information about Financial Resources) (Amendment) Regulations 2015
Shailesh Vara Excerpts(9 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
I beg to move,
That the Committee has considered the draft Civil Legal Aid (Merits Criteria and Information about Financial Resources) (Amendment) Regulations 2015.
May I say what a pleasure it is to serve under your chairmanship, Mr Davies? I think this is the second time in almost the same number of weeks.
Mr Vara
We are flattered, Sir.
The statutory instrument before us amends the Civil Legal Aid (Merits Criteria) Regulations 2013—hereafter referred to as the merits criteria regulations—to specify the merits criteria that must be met to qualify for civil legal aid for applications for post-adoption contact. The statutory instrument also makes amendments to the Legal Aid (Information about Financial Resources) Regulations 2013, hereafter referred to as the information regulations.
The amendments provide that the director of legal aid casework at the Legal Aid Agency may make an information request to the relevant Secretary of State to find out whether a legal aid applicant is in receipt of direct payments for special educational needs or direct payments under section 17A of the Children Act 1989. That information is relevant for the purposes of the means assessment that the director must carry out.
Orders for post-adoption contact were introduced by the Children and Families Act 2014, which inserted sections 51A and 51B into the Adoption and Children Act 2002. Applications can now be made for a post-adoption contact order when the court is making an adoption order or when an adoption order has been made. The provisions came into effect on 22 April 2014. The 2014 Act also amended part 1 of schedule 1 to the Legal Aid, Sentencing and Punishment of Offenders Act 2012. That means that legal aid may be available for any application for post-adoption contact where the person applying for legal aid provides evidence of domestic violence or child abuse, or where they are a child who is a party to the proceedings.
The merits criteria regulations set out the merits criteria that must be applied by the director of legal aid casework at the Legal Aid Agency when determining whether an applicant qualifies for civil legal aid under part 1 of schedule 1 to LASPO. Broadly speaking, the criteria provide the basis for deciding whether it is justified to provide or continue to provide public funds in an individual case. The factors to be considered are similar to those that would influence a privately paying client of moderate means when considering whether to become involved in proceedings.
Regulation 2 of the merits criteria regulations sets out the interpretation and definition of terms used. The statutory instrument adds certain civil proceedings in relation to post-adoption contact orders to the definition of “private law children case”. As a result, the merits criteria, which apply to such proceedings when determining an individual’s eligibility for legal representation, will be those set out in regulations 64 and 68. That means that some elements of the standard merits test will not apply, such as the requirement for the case to be unsuitable for a conditional fee arrangement.
Separately, regulation 69 of the merits criteria regulations sets out the criteria for determinations for legal representation in relation to family cases to which specific merits criteria apply, other than those specifically provided for elsewhere in the merits criteria regulations. The amendments made by the statutory instrument will also exclude determinations in relation to certain post-adoption contact orders proceedings from the scope of regulation 69. That exclusion is necessary because, as I have already mentioned, the applicable criteria for such matters will be those in regulations 64 and 68.
I will now turn to the amendments to the information regulations. A child with a special educational need may be eligible for an education health care plan, which brings their education, health and social care needs into a single, legally binding document. Direct cash payments may be made to the child’s parent or guardian, or to the young person or their nominee, allowing them to arrange the provision of necessary services, such as transport, as identified in the individual’s plan. The direct payments are currently made under the Special Educational Needs (Personal Budgets) Regulations 2014, made under section 49(3) of the 2014 Act. Direct payments may also be made under section 17A of the Children Act 1989 to parents of disabled children, a disabled person with parental responsibility for a child, or disabled children aged 16 or 17, to meet their assessed needs.
The direct payments are disregarded for the purposes of a legal aid financial eligibility assessment following amendments previously made by the Legal Aid, Community Legal Service and Criminal Defence Service (Amendment) Regulations 2015, which came into force on 13 April 2015. Therefore, the direct payments are not included when calculating a person’s disposable income.
The information regulations give the director of legal aid casework the power to request information from the relevant Secretary of State about a prescribed benefit that an individual is receiving, in order to make a financial assessment of legal aid eligibility. It is the Government’s intention that the director be able to make an information request to the Secretary of State to find out whether a legal aid applicant is in receipt of direct payments that are disregarded for the purposes of the legal aid financial eligibility assessment. The amendment to the information regulations will enable the director to make such a request.
The statutory instrument makes relatively minor, but none the less important, changes to the civil legal aid scheme to provide for the application of specific merits criteria when determining a person’s eligibility for legal aid for applications for post-adoption contact, and to provide for efficiency in the assessment of legal aid eligibility through the power to make information requests. I commend the statutory instrument to the Committee.
Mr Vara
May I say what a pleasure it is to serve again with the hon. Member for Hammersmith? I am flattered that he has been suffering withdrawal symptoms, but I am minded to say that he should keep that relatively quiet, because we do not want word of that getting around. It had been a pleasure to deal with the hon. Member for Kingston upon Hull East.
Mr Vara
For the record—I would not want to upset him. As the hon. Member for Hammersmith is aware, LASPO is a major piece of legislation and the Government committed to review it between three and five years of its implementation. That review will be in the not-too-distant future.
On the number of SIs that have gone through as a consequence of LASPO, I hope that the hon. Gentleman will appreciate that it is a major piece of legislation and, as such, it is necessary to deal accordingly with consequential changes. That is why we have had such a number of SIs. I do not know the number offhand, but I am minded to say that other major pieces of legislation are likely to have had a large number of consequential statutory instruments as well.
The hon. Gentleman mentioned the technicality of the use of the negative SI process. I must apologise to the Committee for that technical error. I am happy to assure the Committee that as a consequence no individuals who were eligible for legal aid before this debate missed out, so there has been no impact on the public. I apologise for that technical error, which we are now putting right by considering this affirmative statutory instrument.
I believe that this is a worthwhile measure and I am pleased that the hon. Gentleman agrees with it.
Question put and agreed to.
Court Charges (Access to Justice)
Shailesh Vara Excerpts(9 years, 1 month ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
May I say what a pleasure it is to serve under your chairmanship this afternoon, Mr Gray? I congratulate the hon. Member for Hampstead and Kilburn (Tulip Siddiq) on securing the debate and on so eloquently and passionately putting forward her views. I also commend all the other colleagues who have joined the debate, which shows the importance that colleagues attach to this very important subject.
The Government believe that convicted adult offenders should take responsibility and contribute towards the costs that they impose in the criminal courts. The criminal courts charge has made it possible to recover some of those costs from offenders, which in turn is reducing the burden on law-abiding taxpayers.
Broadly, the levels of the charge cannot be more than the relevant costs reasonably attributable to a particular type of case, in line with the limits of the primary legislation. This means that when the costs of running the courts change, such as when efficiencies are made and running costs decrease, we will need to be able to change the levels of the charge to reflect that. As we have specified the levels of the charge in secondary legislation, we can review the charge levels and will change them when necessary.
The criminal courts charge framework means that it is imperative that offenders are given a fair and realistic opportunity to pay the charge. It is important to remember that, in setting payment terms, the court has the discretion to consider the offender’s means—a point that the hon. Lady considerably expanded on. The court may make sure that payment terms are set at an affordable rate. Offenders can also contact a fines officer at any point to request variations in payment rates if their circumstances change and they are no longer able to pay at the rate initially set. At those points, the court and fines officer will have an opportunity to take existing debts into account, making sure that repayment is reasonable and affordable, given the offender’s individual circumstances.
Melanie Onn
Thank you, Mr Gray; the Minister referred to me as Liz Saville Roberts yesterday, so I am not doing very well.
On the point about people who are unable to pay the costs, for some, a financial penalty is utterly meaningless. Those without the means to pay are without the means to pay, and reducing the cost will not make a difference if they are already severely indebted. If they are not in a position to earn any additional funds, does it not add to the burden of an administrative system to seek to reclaim costs from somebody who clearly is never going to be able to pay them?
Mr Vara
I am grateful to the hon. Lady for intervening; she gives me the opportunity to explain an important issue. The criminal courts charge is payable only after, first, the compensation has been paid; secondly, the victim surcharge has been paid; thirdly, the prosecution costs have been paid; and, fourthly, fines have been paid. A judge imposes those, and only when all four have been paid does the criminal courts charge come along; and, although set at a specific rate, it is nevertheless assessed by the court’s officers on the basis of ability to pay. That means that the other debts, income and all other such financial factors are taken into account; and then, based on what the officer feels is an acceptable way for the charge to be paid, the money is paid, after the other four impositions have been dealt with. I might add that if an individual has made all reasonable efforts to make the payment and they have not reoffended, then after two years whatever is left is scrapped.
Keir Starmer
Does the Minister agree that it is highly unusual for a number of magistrates to resign over an issue such as this? When they do so, what is the level of concern in the Department, ranked between one and 10?
Mr Vara
We have some 20,000 magistrates. At any given point, there are always some who are resigning. It is regrettable that some have felt it necessary to resign on that basis, but I will say that magistrates do hugely beneficial work. It is an important role in society and they give up valuable time of their own to do a good service. Of course, it would be wrong for me to comment on individual circumstances, but it is regrettable that some have felt it necessary to resign on that basis.
Carolyn Harris (Swansea East) (Lab)
Does the Minister not agree that the fact that only a fraction of the imposed costs has been recovered indicates that those charged with repayment are unable to repay, and that this therefore makes the whole court charge untenable?
Mr Vara
It is not yet known how much has been recovered, because those statistics will be forthcoming in the December quarterly statistics. Just to explain, they were not in the September quarterly publication because, although initial data from the first three months of operation—the change having taken place in April—were included in the regular September quarterly statistics, it was not possible to provide separate figures on the charge in time for that publication which met the data quality standards required for published management information. Detailed figures will, however, be published on 17 December.
I note the comments made about the effects on the offender’s plea decision and the issue of access to justice. The Government are committed to ensuring a fair and effective criminal justice system that is accessible to all, and we are assured in the knowledge that the coalition Government carefully considered the compatibility of the criminal courts charge provisions with the European convention on human rights, on article 6 “access to the court” grounds. Article 6 of the European convention on human rights has an implicit right of access to the courts, and the charge does not interfere with that right in any way. In particular, it should be remembered that the charge is imposed at the end of proceedings. Defendants facing trial are not required to pay the criminal courts charge and the charge is not a condition of an offender being able to access the courts. A person will be subject to the charge only if convicted following a court hearing that will have taken into consideration all the available evidence. Therefore, those who are innocent and should be found not guilty by the courts will not be required to pay the charge.
We should also remember that our justice system already creates a number of incentives for those who enter early guilty pleas to ensure that the wheels of justice run more smoothly. For example, if defendants who are guilty enter a guilty plea as early as possible, the courts recognise the benefit to victims, witnesses and the criminal justice system as a whole by means of a reduction in sentence. I recognise, however, the need to ensure that any incentives are proportionate and I note the concerns expressed about the matter.
Keir Starmer
I spent many years working on proposals for early guilty pleas and I support them, but the underlying principle was always that the sentence or consequences were reduced for an early guilty plea, not increased for not pleading guilty. Does the charge not offend that principle, and was the Sentencing Council consulted before the charge was brought forth?
Mr Vara
I am not sure I follow what the hon. and learned Gentleman is saying. It seems pretty straightforward that at the moment we have a system whereby if somebody pleads guilty, it assists the criminal justice system, the witnesses, the victim and so on, and proper due regard is taken of that. In this instance, if a person pleads guilty, due regard is taken, but they should not plead guilty if they are not guilty. They should allow the court process to take its course.
Keir Starmer
I will be brief, and I accept that the debate is time limited. The point I am making—it is a point of principle—is that the courts have always fixed the penalty and then reduced it for an early guilty plea. The penalty has never gone up because someone did not plead guilty in the first place. That is the fundamental principle that is being offended.
Mr Vara
The charge is not part of the sentencing process, and that has been made abundantly clear to magistrates and the judiciary. It is a contribution to court costs and is not intended to be taken into account for sentencing purposes. There has been confusion, and I want to put on the record the fact that it is not intended to be a means of sentencing.
Given the financial imperative to bring down public spending, the Government must ensure that the courts are adequately funded in the long term in a way that allows the budgetary challenges ahead to be met. There is a high level of consensus across the justice system that the current system is unsustainable.
Christina Rees
Can the Minister say whether the revenue collected from the court charges goes towards the legal aid fund?
Mr Vara
The legal aid fund is one of the most generous in the world, after the reductions, at some £1.6 billion. It was previously over £2 billion. We have made reductions and we still rank among the top countries in legal aid provision. It is important to remember that point, which also addresses some of the comments of the hon. Member for Hampstead and Kilburn about access to justice. Let me remind her that, notwithstanding the reductions made by the Government in the past five years, we remain one of the most generous countries in the world for legal aid payments.
There is a high level of consensus across the justice system that the current system is unsustainable. This means that the court system must undergo fundamental reform. Our justice system must work better to deliver swifter, fairer and more efficient access to justice for everyone.
Tulip Siddiq
I would like to know whether the review will be brought forward or whether it will take three years.
Mr Vara
As my right hon. Friend the Lord Chancellor has said, the matter is under review.
Our justice system must work better to deliver swifter, fairer and more efficient access to justice for everyone. It must uphold the rule of law, the most precious asset of any civilised society. Changes to fees have occurred on the civil side, and bearing the burden of running the criminal courts cannot continue to be purely the responsibility of the taxpayer. Offenders must take responsibility for their actions, and the criminal courts charge is an important part of this. In reforming the courts and bearing down on the costs of running them, the Government are determined to make the justice system more efficient and to transform it into a modern public service.
I want to make it clear to the hon. Lady and to all other hon. Members present that I am aware of the concerns and various issues that have been raised, and I will certainly take on board all that has been said by her and other hon. Members. However, it is important to stress—I hope the hon. Lady will appreciate this—that in reviewing the charge, we must consider all the evidence to allow us to form an appropriate view and to help us to make sure that the criminal courts are run efficiently and fairly. I congratulate the hon. Lady again on securing this important debate.
Question put and agreed to.
Resolved,
That this House has considered court charges and access to justice.
Court Closure (Buxton)
Shailesh Vara Excerpts(9 years, 1 month ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
It is a pleasure to serve under your chairmanship, Ms Vaz. I believe it is the first time that I have done so. I congratulate my hon. Friend the Member for High Peak (Andrew Bingham) on securing this debate. As he said, we have known each other for many years, and I have always known him to be a diligent and conscientious Member of Parliament. His response to the consultation does him enormous credit, and his constituents should be proud of him. He spoke in the main Chamber when we had a debate there, and he and I have spoken about this issue on several occasions, as well as corresponding. He secured this debate, and there is a meeting to follow. His constituents cannot fault him for his sterling work in representing them.
My hon. Friend referred to a number of inaccuracies, and was unhappy with the apology given. I unreservedly and sincerely apologise for the inaccuracies in the consultation, and I add that whenever such inaccuracies have been brought to our attention, we have sought to clarify them as quickly as possible. I have before me a letter, which is dated 30 July and was sent to a number of people, from Lucy Garrod, the midlands delivery director. She refers to the absence of a lift and the travel times used as a guide, and specifies how the utilisation figures were calculated, simply saying that there were 248 sitting days every year and the calculations were made on the basis of five-hour days.
My hon. Friend the Member for Macclesfield (David Rutley), who generously said, “Hear, hear” during the comments made by my hon. Friend the Member for High Peak, made a very good contribution, referring to travel times and costs. We envisage a modern 21st-century court structure in which people do not travel as much as they do now. I will come to that a little later.
Notwithstanding the inaccuracies, which we have sought to clarify as quickly as possible, I believe that there is merit in including these two courts for consideration in the consultation. The world outside the courts is changing rapidly. When we speak of access to the courts, we must acknowledge how the 21st century is progressing. People expect to be able to transact their business online, quickly and efficiently, at a time that suits them, and modern technology allows them to do so. Cheques and paper forms have been replaced by contactless payment cards and smart apps, while shopping for almost anything can be done from the comfort of one’s home. It is such technology that gives us an opportunity to invest in our courts and modernise them to meet the present and future requirements of court users and improve the delivery of justice.
Such improvement cannot be secured without difficult decisions. We must recognise that one third of our courts are used at less than half their capacity. As we have been told, the utilisation of Buxton magistrates and county court in the last financial year was approximately 27%, and operating costs were approximately £88,000, excluding staff and judicial costs. When such utilisation figures incur such costs, we must ask in the interests of the taxpayer whether we are using that money effectively.
We must also appreciate that the way in which the public access our courts is changing rapidly. Access to justice need not happen only by attendance at a conventional court building. For example, we are exploring whether there are opportunities to hold hearings in local buildings, which would help just as effectively to maintain a local presence for justice. There is already proven technology in my hon. Friend’s constituency: a video conference facility is available at Buxton citizens advice bureau, and the police already give evidence via live links to courts in the west midlands. The citizens advice bureau with the video conferencing facility is just across the road from the court, but it could just as well be five, 10 or indeed 25 miles away. Through that facility, the courts can be accessed.
Our reform programme must also be considered in the wider context of our plans to transform how courts and tribunals operate and deliver services to the public. As my right hon. Friend the Lord Chancellor and Justice Secretary has said, the reform of the Courts and Tribunals Service offers a once-in-a-generation opportunity to create a modern, user-focused and efficient service.
Many people encounter our justice system when they are at their most vulnerable, when they are a victim or a witness in a criminal case, or as an individual, business or family trying to resolve a dispute. We must ensure that we make better use of technology to provide easier access to a more responsive system, with swifter processes and more proportionate services. Front-line staff work incredibly hard to provide a high-quality service to the public. However, they and our customers are often poorly served by the infrastructure supporting the administration of a system in desperate need of improvement.
Of course we must respect our traditions, and we must ensure that there is a place for the most serious cases in the courts in the traditional way. However, progress towards a more proportionate approach to court attendance would eliminate wasted time and enhance confidence in the administration of justice. We have a duty to offer more convenient and less intimidating ways for citizens to interact with the justice system while maintaining the court’s authority for serious cases.
Andrew Bingham
I am sure that the Minister will come to this in his closing remarks, but he mentioned convenience. Will he address the issue that I raised about the potential of going to Stockport instead of Chesterfield? As I said, Chesterfield is completely and totally inconvenient. If the Government are to pursue that path, which I believe is wrong, will he at least give me some indication that despite the regional and county boundary, Stockport will be given serious consideration as an alternative?
Mr Vara
I can certainly give my hon. Friend that assurance, and I can tell him that we are crossing borders and boundaries wherever necessary. He has made a powerful case for Stockport as an alternative. My officials are at hand, and I will personally see to it after this debate that they seriously consider that option.
I am mindful of the time restriction. I will round up by saying that we propose a reform programme fit for the 21st century. It is our intention that modern technology should make it unnecessary for many people who currently go to court to do that. That includes lawyers, who at present can find themselves hanging around at court for hours to have a 10-minute hearing before a judge. We envisage two sets of lawyers booking a 10-minute slot with a judge, who can then have a video conference or a telephone conference.
The world has moved on, and we must move on with it. The Lord Chancellor and I face difficult decisions. Many people have responded to the consultation. Generally speaking, the consultation has had more than 2,000 replies from members of the public and the legal fraternity. It will not be easy to take decisions, but I assure my hon. Friend that all his contributions, including the comments that he has made in this debate, will be considered seriously when we come to those decisions. I congratulate him again on securing this debate.
Question put and agreed to.
Oral Answers to Questions
Shailesh Vara Excerpts(9 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Susan Elan Jones (Clwyd South) (Lab)
12. What assessment he has made of trends in the number of litigants in person since the Legal Aid, Sentencing and Punishment of Offenders Act 2012 came into effect.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
It has long been the case that some people represent themselves in courts. The proportion of individuals with legal representation has remained broadly stable in recent years, except in private family law cases where we have seen an increase in cases in which neither party has had representation. This year, we are investing in a new strategy designed to provide more support to litigants in person. Judges, magistrates and legal advisers are well equipped to support litigants in person through the court process.
Ian C. Lucas
It seems the Minister, in the company of the head of the Courts Service, is alone in thinking there is no crisis because of the increase in the number of litigants in person in our legal system. If the Minister really wants to know what is going on, will he commission an anonymous survey of district judges and court clerks to find out the truth of the crisis in our court system that is happening as we speak?
Susan Elan Jones
The Secretary of State and other Ministers will be aware of the concerns raised by the Justice Committee, the National Audit Office and others regarding litigants self-representing. Will the Department bring forward, from 2017, the planned review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012? It is sorely needed.
Mr Jonathan Djanogly (Huntingdon) (Con)
There are longstanding and very important issues relating to litigants in person that go back much further than the LASPO Act. What actions are the Government taking to simplify and demystify the court process, and to take away the complicated legalities that make it so difficult for litigants in person?
Mr Vara
I pay tribute to my hon. Friend, who was a very distinguished Minister in the Ministry of Justice not so long ago. He is absolutely right. The concept of litigants in person is not new: it has applied for many years, indeed decades. To demystify the court process, we have put better processes in place—online guidance, guidance from court officers and judicial training—to ensure as much support from the judiciary and other legal advisers as possible.
John Howell (Henley) (Con)
With the growth in litigants in person there has been a growth in McKenzie friends. There are two types: those who provide backgrounds to unfamiliar settings and those who act effectively as lawyers and charge for their services. What is the Minister going to do about the latter?
Karl Turner (Kingston upon Hull East) (Lab)
In the first quarter of the year, at least one party was not represented in 76% of private family cases, while the Master of the Rolls has warned that civil courts are experiencing significant impacts from the rise in the number of litigants in person. Part 1 of LASPO has been an unmitigated disaster. Will the Justice Secretary now bring forward the much-needed review of LASPO to mitigate the shambles of his predecessors?
Mr Vara
The hon. Gentleman refers to family courts. Being relatively new to his post, he might wish to reflect on the comments made by his colleagues, particularly the hon. Member for Hammersmith (Andy Slaughter), as reported in the Law Society Gazette on 24 September:
“Slaughter conceded that the Labour party would have been forced to make cuts to family law funding and promote mediation as a cheaper option. He added that a Labour government would seek to promote and improve mediation services on offer.”
The article also said—[Interruption.] It is understandable that Opposition Members do not want to hear the truth, but I am quoting one of their own colleagues—[Interruption.]
Mr Vara
I am sure that other Members, along with you, are keen to hear it, Mr Speaker.
The article quoted the hon. Gentleman as saying:
“‘We’re not going to get in a Tardis and go back to before,’ he said. ‘We are in a world where resources are tight and it would not be right to pretend otherwise.’”
Stephen Metcalfe (South Basildon and East Thurrock) (Con)
7. What plans he has to improve the prison estate; and if he will make a statement.
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
The Courts and Tribunals Service reform programme is once-in-a-generation opportunity to create a modern, user-focused and efficient service. As part of that programme, I announced on 16 July proposals for reform of the court and tribunal estate. The consultation closed on 8 October, and I shall carefully consider all responses before taking forward any decisions.
Matthew Pennycook
Two courts in my constituency, Greenwich magistrates court and Woolwich county court, face closure under the Government’s proposals to reform the HMCTS estate. Although I do not dispute that there can be a case for the closure of under-used or inadequate facilities in some cases, I am extremely concerned that these proposals will further restrict access to justice for my constituents, particularly older people and those on low incomes who may face far longer journey times. Will the Minister guarantee today that in constituencies such as mine that face court closures, a local HMCTS presence will be retained?
Mr Vara
First, may I thank the hon. Gentleman for his contribution to the consultation, which I read very carefully? He acknowledges in his submission that there are alternative methods, such as the use of alternative premises on a part-time basis. Access to justice does not mean physical presence in terms of attending a court. Modern technology such as video conferencing, teleconferencing and a variety of other methods is used in a variety of other sectors, so there is no reason why we should not be looking at that in terms of the court structure.
Richard Fuller (Bedford) (Con)
Given that the consultation has now closed, will my hon. Friend commit to publishing a detailed financial analysis of the cost savings in each court area identified, and publish any errors in fact that have been highlighted in the consultation documents?
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I am sure I do not need to remind the Minister that the Welsh Language Act 1993 requires his Department to consider the impact of new policies on the Welsh language. Will he commit to undertake and publish a Welsh language impact assessment before deciding on the future of courts in Wales?
Tulip Siddiq (Hampstead and Kilburn) (Lab)
11. What plans he has to review the level of the criminal courts charge.
Alberto Costa (South Leicestershire) (Con)
T4. In evidence to the Justice Committee in July, the Secretary of State confirmed that his Department would be undertaking a review of the Legal Services Act 2007. Can he please confirm today if a date has been set for that review, and if not when the date of the review will be set?
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
I am grateful to my hon. Friend for that question and he is right that my right hon. Friend the Lord Chancellor and Secretary of State for Justice did say to the Justice Committee that there would be a review of the regulation of the legal services sector as well as the 2007 Act. Clearly this is something we need to give consideration to. It will happen within this Parliament and the House will be informed in due course of the exact scope and timeframe.
Mr Douglas Carswell (Clacton) (UKIP)
T3. Yesterday the Prime Minister announced changes to Government policy regarding the use of special guardianship orders. What assurances can the Minister give that this will not inhibit the ability of loving grandparents to assume legal responsibility for their grandchildren?
Nicola Blackwood (Oxford West and Abingdon) (Con)
T6. Does the Minister agree that specialist courts for crimes with high reoffending rates like drugs and sexual offences can offer a number of benefits if implemented correctly, not only by reducing those reoffending rates but also by more sensitive handling of vulnerable witnesses, which can lead to better evidence and fewer cases collapsing?
Mr Vara
My hon. Friend is absolutely right to say that specialist courts can lead to a reduction in reoffending. Indeed, my right hon. Friend the Lord Chancellor recently visited the United States, where there is evidence that reoffending does diminish with specialist courts. We will be taking on board whatever we can learn to put into practice in the UK.
Dr Philippa Whitford (Central Ayrshire) (SNP)
T5. In the new ministerial code, published on 15 October, Ministers are obliged to comply with “the law”, but the phrase “including international law and treaty obligations and to uphold the administration of justice”has been removed. The former Attorney General did not like that phrase very much, so does the Minister feel this changes the obligation to comply with international law?
Anne McLaughlin (Glasgow North East) (SNP)
T9. Legal aid was withdrawn from refugees who safely reached these shores and needed to be reunited with their families because this was deemed to be a straightforward process. The British Red Cross report entitled “Not So Straightforward” indicates that that is not the case. Has the Secretary of State read the report? Will the Government reintroduce legal aid or will they simplify the process so that legal aid is not required and the process in in fact straightforward?
Mr Vara
I am grateful to the hon. Lady for raising the issue of legal aid again. As I said earlier, we have committed to having a review of the implementation of the Legal Aid, Sentencing and Punishment of Offenders Act 2012. That will be carried out within three to five years of its implementation, but we do keep a watching eye on matters as they evolve.
Stephen Hammond (Wimbledon) (Con)
T8. The Prisoners Education Trust does much to prepare prisoners for release, but to ensure that they get the skills they need for release, does the Minister think it would be sensible to encourage prison governors to be more entrepreneurial and start up more businesses inside prisons?
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
A constituent of mine is seeking an appeal against an immigration refusal but has been waiting six months. Another has a family member who was given leave to appeal this June and has a date for a tribunal hearing next May. What is the Secretary of State doing to reduce these unreasonable waits?
Michelle Donelan (Chippenham) (Con)
The Minister will be aware that the future of Chippenham’s courthouse is currently with the HM Courts and Tribunals Service consultation and that Swindon courthouse is in desperate need of renovation. While that work is carried out, Chippenham is perfectly placed to provide the ideal location. May I urge him to consider that key fact when the future of Chippenham’s courthouse is determined following the consultation?
Toby Perkins (Chesterfield) (Lab)
The needs of female offenders are different from those of male offenders in the Probation Service. That has been established across three Prison Reform Trust reports. When the call for evidence of Her Majesty’s Inspectorate of Probation finally reports, will the Government finally allocate the resources required to ensure that we reduce reoffending among women prisoners?
Civil Legal Aid (Merits Criteria) (Amendment) (No.2) Regulations 2015
Shailesh Vara Excerpts(9 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
I beg to move,
That the Committee has considered the Civil Legal Aid (Merits Criteria) (Amendment) (No. 2) Regulations 2015 (S.I., 2015, No. 1571).
It is a pleasure to serve under your chairmanship this morning, Mr Wilson. This statutory instrument amends the Civil Legal Aid (Merits Criteria) Regulations 2013—which I will refer to hereafter as the merits criteria regulations—so that legal aid funding can be provided in some cases where the prospects of succeeding are below 50%, but where legal aid funding is required under the European convention on human rights or EU law.
The changes have been made to reflect the findings on the legal aid merits test made by the High Court in the recent case of IS. While the judgment is under appeal, the Government considered it important that these amendments were brought into force without delay to provide a means by which the Legal Aid Agency could comply with the judgment in the interim. Failure to make such a change promptly would have resulted in an extended period in which the Legal Aid Agency might, in some cases, either have taken an unlawful decision or, indeed, have been unable to take a decision.
For those reasons, and owing to limited parliamentary time, this statutory instrument was made and brought into force using the urgency procedure provided for under the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
The merits criteria regulations set out the criteria that must be applied by the director of legal aid casework at the Legal Aid Agency when determining whether an applicant qualifies for civil legal services under part 1 of schedule 1 to LASPO. Broadly speaking, those criteria provide the basis for deciding whether it is justified to provide or to continue to provide public funds in an individual case. The factors to be considered are similar to those that would influence a privately paying client of moderate means when considering whether to become involved in proceedings.
The merits criteria regulations include a number of different requirements, including a prospects of success test for an application for full representation. When the prospects of success test applies, the regulations generally prevent the Legal Aid Agency from funding any case where the prospects of success are below 50%. Had the merits criteria regulations remained unamended, the director would therefore have been placed in a bind. Refusing legal aid in some cases would have been an unlawful decision, as, on the High Court’s findings, it might have resulted in a convention breach. Although the Legal Aid Agency could have sought to delay non-urgent decisions, we did not think that it would be reasonable to await the outcome of the Government’s appeal in this matter, which may not be known for some time.
The amendments made by this instrument mean that in cases where an application for full representation is subject to an assessment of its prospects of success, legal aid may now be provided for some cases assessed as having borderline or poor prospects of success. The director will need to be satisfied that it is necessary to determine, or, in the case of a risk of a breach, appropriate to determine that the prospects of success test is met, to prevent a breach or the risk of a breach of the legal aid applicant’s rights under the convention or enforceable EU rights.
The Joint Committee on Statutory Instruments has expressed its views on the clarity of the transitional provisions in this SI. I apologise to Members of both Houses with an interest for any confusion this may have caused. We acknowledge that Committee’s views, and the Department intends to develop a revised drafting approach to be used in the future that is more closely targeted at solely those cases that begin before commencement. However, we consider that the transitional provisions in this instrument still operate to achieve the policy intention.
This instrument makes important and necessary amendments to the merits criteria regulations to make sure that legal aid will continue to be provided in any case where refusal to grant it would be unlawful. It does so while maintaining the underlying purpose of the civil legal aid eligibility criteria and the legal aid scheme: to make sure that the limited legal aid budget is directed at the cases that most justify public funding.
I commend the statutory instrument to the Committee.
Mr Vara
I thank the hon. Gentleman for his comments. Mr Wilson, you will of course appreciate that this is a discussion about not legal aid generally but specifically amending the merits criteria. With your permission, I will stick to the criteria of the debate, rather than broadening it. I will, however, make one or two general comments. LASPO does provide for a review, and we intend to have that review, but we will do it in the time schedule set out in the Act.
Coming back to the issue at hand, I simply say that the criteria for exceptional case funding are specific, and the giveaway is in the name—such cases are meant to be exceptional. I appreciate that some people have regarded it as a discretionary route to be pursued if a legal aid application is not granted, but it was supposed to be exceptional case funding, granted under specific circumstances, such as a breach of an individual’s ECHR rights or EU rights.
On numbers, we have granted more and more applications each quarter. There were 121 grants in the most recent quarter, which is a grant rate of 35%. That was the highest number since the scheme began, and compares with 38 grants made in the same quarter of last year. We have provided additional funds for litigants in person.
The regulations are a good measure, and I am pleased that the Opposition agree with them.
Question put and agreed to.
Draft Maximum Number of Judges Order 2015
Shailesh Vara Excerpts(9 years, 2 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
I beg to move,
That the Committee has considered the draft Maximum Number of Judges Order 2015.
It is a pleasure to serve under your chairmanship this morning, Mr Davies. I anticipate that this sitting will be brief.
The effect of the draft order is simply to increase the number of Court of Appeal judges by one. The number is set by statute under section 2 of the Senior Courts Act 1981, which currently provides for a maximum of 38 Court of Appeal judges. In March 2015, Lord Justice Pitchford, an existing Court of Appeal judge, was appointed by the Home Secretary to lead an inquiry into undercover policing and the operation of the Metropolitan police’s special demonstration squad. The inquiry, which began on 17 July, was established under the Inquiries Act 2005 and is anticipated to conclude around the end of 2018.
Having been appointed as such, Lord Justice Pitchford remains a Court of Appeal judge and remains counted in the current complement of 38. However, he is unable to fulfil any duties in the Court of Appeal while he leads the inquiry. To ensure that the total number of Court of Appeal judges available for deployment remains at current levels, it is necessary to increase their number by one. There is no method for revising the number of Court of Appeal judges other than by this order. This is a reasonable amendment that aims to maintain the complement of Court of Appeal judges while one of their members is engaged in other important work.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I note that only eight women are Court of Appeal judges. I do not know how many are black and minority ethnic, but only 7% of judges across all courts and tribunals are BME. Might this be an opportunity to address some of the diversity issues among the judiciary?
Mr Vara
The hon. Lady makes a good point. We are very keen that there should be proper judicial diversity. The judiciary should include women and people from diverse ethnic and social backgrounds. I think that the hon. Lady would agree that it is nevertheless important that we have people with the right qualities, but I entirely agree that we should do everything possible to increase diversity. There is a set procedure for appointing a Court of Appeal judge. I am sure that when they consider who to appoint, they will bear in mind what the hon. Lady has articulated and what I know is felt across the political divide. She makes a good point and I thank her for that.
Karl Turner (Kingston upon Hull East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies, for the first time. Given the proceedings thus far, I am sure it will be a pleasure and a privilege. I must declare an interest. My wife is a fee-paid judge who sits in the first-tier social welfare tribunal. I do not think that that is recorded in the Register of Members’ Financial Interests, but no doubt it will be now. The Opposition do not object to the order. We too want to congratulate Lord Justice Pitchford on his appointment to lead a very important inquiry.
I have some questions for the Minister. I think I am right in saying that there has been no need to extend the number of Court of Appeal judges since 2008; it is a relatively rare occurrence. I wonder whether an increase might be required again any time soon. Do the Government plan to increase the number of Court of Appeal judges? If they do, would that be due to the fact that there is clearly a delay in Court of Appeal cases? Cases are being bumped and there is a backlog. Might that require another increase in the number of judges in the not too distant future?
My hon. Friend the Member for Brentford and Isleworth properly raised the issue of diversity. Might the measure provide an opportunity for the Government to look at that again? Across the House, we are always concerned about diversity in the legal profession generally—among solicitors, the Bar and the judiciary. This might be an opportunity to improve the diversity of gender and ethnicity in the judiciary. That said, we have no real objection. Will the Minister clarify those points?
Mr Vara
I am very happy to do so. Before I do, may I take the opportunity to congratulate the hon. Gentleman on his relatively recent appointment as shadow Solicitor General? The position carries huge responsibility. I wish him well and look forward to working with him.
We are making this appointment because, in the general scheme of things, 38 is not a large number of Court of Appeal judges. Taking one away from that contingent would have an impact on the current number of cases and how they are progressed. It is important that we continue with the current flow of dealing with cases, which is why we have this new appointment. Any future appointment is a matter to be considered at a later date. At the moment, we are simply filling an existing gap.
The hon. Gentleman rightly raised the issue of diversity. I made some comments about that earlier. I emphasise those and add that diversity is critical. We have to ensure that the judiciary, at all levels, is representative of mainstream society. Given the interest that he declared, he will be aware that, at a certain level, there is diversity. It is crucial that we have that diversity in the upper echelons of judiciary—more women, more people from ethnic minorities and more people from other social backgrounds. I, for one, am very keen on that. I have regular meetings with the judiciary and the commission that appoints judges to ensure that that matter is foremost in their minds.
Question put and agreed to.
Welfare Reform and Work Bill (Tenth sitting)
Shailesh Vara Excerpts(9 years, 2 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
I beg to move amendment 172, in clause 19, page 18, line 25, leave out subsections (4) to (6).
This amendment and amendments NC19 and NS1 alter the provision for determining the amount of rent payable in respect of the first relevant year (or a later relevant year) in cases not covered by clause 19(1).
The Chair
With this it will be convenient to discuss the following:
Government amendments 174, 175, 178 and 179.
Government new clause 19—Further provision about social housing rents.
Government new clause 20—Provision about excepted cases.
Government new clause 21—Rent standards.
Government new clause 22—Interpretation.
Government new schedule 1—Further provision about social housing rents.
Government amendments 180 to 183.
Mr Vara
It is good see you this afternoon, Mr Owen, as it was this morning.
We recognise that tenancies will start at different points in the four years of rent reductions and that providers will want to know what rent is set on re-lets for new social housing and for conversions to affordable rent. First, I turn to the more substantial amendments in the group, which make more detailed provision for this situation than clause 19 as introduced. They enable a provider to determine the amount of rent that is initially payable when a tenancy begins after 8 July 2015. The cases are not covered by clause 19(1), which applies to the generality of tenants who were tenants of their social housing on 8 July. Clause 19(1) also governs the future rent reductions for all tenants whose tenancies began after 8 July 2015, once they have been tenants for a full relevant year.
New schedule 1 sets out the details of how rent should be set for different types of new tenancies starting after 8 July 2015. It also provides for exceptions, exemptions and enforcement of the schedule. Part 1 provisions are intended to clarify how the rent reduction requirements should be applied in relation to new tenancies after 8 July, whether that is a re-let of existing housing, new social housing or letting at affordable rent. In the first of those instances, re-lets that exist in social housing will be able to be let at the greater of a social rent or an assumed rent rate.
The social rent rate, which is prescribed in sub-paragraph (4) of new schedule 1, is set in relation to a formula that will be set out in regulations. Sub-paragraphs (7) and (8) provide that the Secretary of State may define “formula rate” in the regulations. Our intention is that the regulations will mirror the formula set out in the rent standard guidance and the Government’s guidance on rent. For supported housing, we will continue to allow rents to be set at up to 10% above formula. I appreciate that these are important issues for social housing providers, so I draw Members’ attention to this change.
The assumed rent rate, which is prescribed in sub-paragraph (5), is based on the rent that was payable under a tenancy in place on 8 July, but the calculation reflects the rent reduction requirement. This is important for providers whose rents have historically been set higher than the formula rent at 8 July 2015. In those circumstances, we do not want providers losing more than 1% year-on-year in rent reductions, which would have been the case if rents for all new tenancies were set with reference to the social rent rate.
Sub-paragraph (6) clarifies that, if the tenant is in that social housing for a part of the year only, or if the requirement ceases to apply because of an exception or exemption, the reduction in rent applies on a pro rata basis. In instances of new social housing, the rent will be set with reference to the social rent rate as described above. Paragraph 3 sets out the case for a person becoming a tenant of affordable rent housing after 8 July 2015.
Sub-paragraphs (2) to (4) provide that the rent payable by that tenant should be set at no more than 80% of what would be the market rent for that social housing and that, in the following years, a reduction of 1% per annum applies. Again, such rents will be on a pro rata basis if appropriate. What constitutes affordable rent housing will be set out in regulations made under paragraph 4. The intention is to mirror the existing policy that homes should be let at affordable rent levels only in certain circumstances, including where there are agreements or arrangements with the Homes and Communities Agency, the Greater London Authority and the Secretary of State, to control housing benefit costs.
Part 2 of the new schedule sets out exceptions to, exemptions from, and the enforcement of, the requirements in part 1. Paragraph 5 makes provision for exceptions that mirror those set out in clause 20, namely low-cost home ownership and shared home ownership accommodation, and various exceptions applicable to mortgagees and other lenders when those persons take steps to enforce a security. Paragraph 5(4) gives the Secretary of State a power to make regulations to disapply the requirements of part 1 in other cases, set out in sub-paragraph (5). In particular, the regulations may include provisions on tenants, tenancies, accommodation and events. They may also include provisions on high-income social tenants and on periods when a tenant’s rent is temporarily reduced or waived.
Paragraph 6 of the new schedule relates to the granting of exemptions by the regulator or the Secretary of State and makes equivalent provision to that in clause 22. Paragraph 7 gives the Secretary of State a power to make provision about the enforcement of the schedule, including provisions to apply part 2 of the Housing and Regeneration Act 2008 with modifications.
Part 3 of the new schedule sets out the conditions relating to regulations made under the schedule. Paragraph 9(2) provides that providers must have regard to guidance when determining assumed rent in cases of properties that were not tenanted on 8 July 2015.
Amendment 172 removes the provision made for other cases in the Bill as introduced. Amendment 174 is a drafting amendment linked to new clause 20 on excepted cases under the new schedule and new clause 19, and is necessary to introduce the new schedule. Amendments 175, 178 and 179 are minor technical amendments consequential on new clause 22 and, in the case of amendment 175, on new clause 21.
New clause 21 expands the provision in clause 19(9) of the Bill as introduced. Sections 194(2A) and 198(3) of the 2008 Act give the regulator of social housing the powers to set and revise standards relating to levels of rent. The new clause ensures that the regulator may not issue standards inconsistent with the provisions on social housing rent in the Bill.
New clause 22 simply gives the meaning of various terms set out in the provisions on social housing rent in the Bill. In particular, subsections (3) and (4) clarify when a tenancy begins, when a tenancy is to be treated as continuing although a new tenancy has been granted, and when a tenancy that has been assigned should be treated as coming to an end. The new clause clarifies the position in respect of new grants of tenancies to the same tenant, including at least one of the tenants who formerly held a joint tenancy, as well as certain changes of tenancy under schedule 1 of the Rent Act 1977 and assignments by way of exchange.
I turn briefly now to new clause 20, which provides the Secretary of State with a power to make regulations regarding the maximum amount of rent payable by a tenant in a category excepted by regulations under clause 20 or the new schedule. It also enables the Secretary of State to make provision regarding the maximum amount of rent payable by a tenant who ceases to be excepted from the rent reduction provisions. Those powers are important as they enable the Secretary of State to make regulations to establish the appropriate rent regime for such excepted cases. In so doing, they give flexibility to make provision for special cases—for example, supported accommodation and tenants whose rent has been temporarily reduced. Providers, at present, have discretion to charge high-income social tenants a higher rent, and it is the Government’s intention to except such tenants from the rent reduction provisions. It is important to ensure, however, that if a tenant’s income drops below the high-income threshold, they will no longer be required to pay a higher rent, and the Secretary of State will be able to require that under the regulations.
We also recognise that providers’ individual circumstances will differ significantly, and the new clause will give the Secretary of State power to provide in regulations for an exemption regime if a provider needs it. The new clause will also enable regulations to provide for enforcement of the regulations by the regulator. Amendment 180 is consequential on the addition of the new clauses and the new schedule to the Bill.
Amendments 181 to 183 are technical and relate to the date upon which the various provisions come into force. Amendment 181 will ensure that the provisions exempting a registered provider from the rent-reduction measures can come into force from the date of Royal Assent. Although we do not expect registered providers to plan on the basis that an exemption will be granted, it is nevertheless important that a provision is put in place quickly where it is needed. Amendment 182 is consequential on amendment 181. Amendment 183 is consequential on the addition of the new clauses and the new schedule and will enable the Secretary of State to introduce regulations quickly following Royal Assent. The Bill provides that such regulations will come into force on other appointed days for other purposes. The intention is to bring the Bill’s provisions into force on 1 April 2016.
I wish to make a clarification. Earlier, I said that paragraph 6 relates to the granting of exemptions by the regulator or the Secretary of State. I said that it makes equivalent provision to that in clause 22. I should have said clause 21.
I thank you, Mr Owen, and colleagues for forbearing in listening to these detailed, technical and necessary comments. I am sure everyone will appreciate that it is necessary to provide such detail on the changes.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
As I said this morning, I accept that these are technical amendments. We will scrutinise them in detail, but I will make more general remarks in relation to my own amendments.
Amendment 172 agreed to.
Amendments made: 147, in clause 19, page 19, line 9, after “a” insert “private”.
This amendment and amendment 148 secure that only private registered providers may have relevant years starting on a date other than 1 April.
Amendment 173, in clause 19, page 19, line 10, leave out “tenants” and insert “tenancies”.
This amendment secures that a private registered provider’s usual practice is determined by reference to numbers of tenancies.
Amendment 148, in clause 19, page 19, line 19, after “A” insert “private”.
Amendment 174, in clause 19, page 19, line 22, at end insert—
“( ) This section is subject to—
(a) section (Provision for excepted cases) (provision for excepted cases);
(b) Schedule (Further provision about social housing rents) (further provision about social housing rents).”
This amendment is a drafting change linked to amendment NC20 (a new clause about excepted cases) and amendment NS1 (a new Schedule making provision about initial levels of rent for tenancies beginning after the beginning of 8 July 2015).
Amendment 175, in clause 19, page 19, line 23, leave out subsections (9) and (10).—(Guy Opperman.)
This amendment and amendments NC21 and NC22 secure that the provision in subsections (9) to (10) is also applied to the provision about levels of rent that appears in the new clause and new Schedule added by amendments NC20 and NS1.
Debbie Abrahams
Thank you, Mr Owen, for that clarification. My hon. Friend makes a relevant point, and perhaps he will ask the Minister directly.
Amendment 85 would require the Secretary of State to produce a report on the availability of accessible and supported housing. Finally, amendment 184 would introduce a sunset clause so that there would be no further reductions in rent after 2020. These things have a way of continuing, so we want to ensure that it is clear that the Government intend there to be no further rent reductions after 2020.
Mr Vara
I am grateful to the hon. Lady for the measured way she has approached the debate and presented the case for her amendments. I am grateful to her for moving amendments 21 and 85, because they give me the opportunity to set out clearly why we have put these measures in the Bill.
The housing benefit bill for England in the social sector now stands at £13 billion, having risen by nearly a fifth over the past ten years. Rising rents in the social housing sector are fuelling that increase, with average rent increases in the social sector more than double those in the private sector over the past five years. The Government are determined to put welfare spending on a sustainable footing and reduce the deficit while protecting the most vulnerable. We made commitments to deliver £12 billion of welfare savings, and the scale of the housing benefit bill means that we must address it, including through social rents, if we are to reduce the deficit.
Neil Coyle
The Minister’s concern for the rising rents in housing associations might be more welcome if it were married with concern for the rise in the private rented sector. Why is the Minister reluctant to address the concern of 70,000 private renters in Southwark and the steep rent rises they face?
Mr Vara
Let us talk about the private rented sector. In the years 2004 to 2014, the rent increase in the private rented sector was 23%, according to the Office for National Statistics. In the same period, the social housing rent increased by 63%. If that does not show that there is a difference, I do not know what does.
Emily Thornberry
I would be happy to take the Minister around Islington, where, I can assure him, the social rent levels are very much lower than private rent levels and the private rents are going up enormously. In my borough, we have great problems finding accommodation for people in the private rented sector if we cannot provide sufficient housing for them in the social rented sector, which we cannot. Our concern is that everything that the Government are currently doing is undermining the social rented sector and will, in the end, lead to a bigger benefit bill.
Mr Vara
I am grateful to the hon. Lady for her contribution, but I suggest she takes up the issue with the Office for National Statistics, rather than with me, as it is a highly regarded independent body. I am minded to say that the vast majority of the public will agree with the ONS, rather than with her.
Peter Dowd
May I ask for clarity? The whole point about the public sector is that it reinvests the money into new houses, new stock, decent homes and so on. The corporate group of the public sector tends to do that—it is part of its raison d’être—but the private sector is not doing it. Will the Minister give his view on that?
Mr Vara
I thank the hon. Gentleman for that contribution. I am mindful of the fact that he was a council leader before entering Parliament, and he brings added value to the Committee, and indeed the House, as a result. I will address the issue he has referred to and the argument that there will be a reduction in housing, so if he will please bear with me for a while longer, I will tell him why I believe that these measures will not have the impact that Opposition Members seem to think they will.
The Government have taken the decision to reduce rent increases within the social sector, which is good news for tenants. Just as I did on Tuesday, I pay tribute to the right hon. Member for East Ham (Stephen Timms), who acknowledged on Second Reading that the 1% reduction was a good thing and that he supported it. He is a distinguished Member of Parliament, and I am sorry that the Opposition Front Bench team has been deprived of the benefits he brought to it. He is a former Chief Secretary to the Treasury and a former Department for Work and Pensions Minister, and commands respect on both sides of the House. Given his ministerial experience, he knows the real position, and he said that he felt the 1% reduction was necessary. To be fair to him, he said he had concerns about the housing stock; I will address those concerns shortly, as I said to the hon. Member for Bootle. However, he recognised that the 1% reduction is necessary.
Rents paid by social housing tenants in England will reduce by 1% a year for four years from 2016. That means that by 2020 they will be paying roughly £12 per week less than they would have had to pay under the current policy of increases at a rate of the consumer prices index plus 1%. The policy will also help taxpayers, who are subsidising rents through the rising housing benefit bill. It is interesting that we have heard a lot of comments regarding housing associations, but no one seems to be acknowledging the financial benefit of £12 a week to the people living in those houses.
Jess Phillips (Birmingham, Yardley) (Lab)
To return to the Minister’s point about the benefit to the taxpayer, people living in lots of different types of supported accommodation, in social housing or in housing association housing are also in work and are taxpayers. I wonder how many times we will have to repeat that point to the Minister. They are not two distinct groups. Everybody pays tax, so will he please stop making out that one group of people is paying for another?
Mr Vara
The hon. Lady speaks of one group. The only conversations we hear are about the people she refers to; she does not talk about the people who are paying through their taxes for social housing but do not live in it. She speaks of a distinction she would rather I did not make—she would rather that we all spoke of just one group. She needs to recognise that there is another group. Perhaps she might reflect on those people occasionally.
Jess Phillips
Is the Minister telling me that the taxes of people who do not live in social housing are put in one pot and the taxes of people who do are put into another, and that those pots pay for different things? Am I confused, or is that money mixed?
The Chair
Order. This is a debate, and I am sure that the Minister will deal with the questions that have been raised.
The Chair
Order. I am conducting a Bill Committee at parliamentary level, and I am sure that the Minister will respond at that level.
Mr Vara
Absolutely, Mr Owen. I refer to all taxpayers, whether or not they are in social housing. All are equal in the contribution they make, but we must recognise that the taxpayer is paying a huge amount into the social housing budget at the moment. We have decided that a 1% reduction is fair. An argument has been put forward about there being inadequate housing; I will come to that shortly.
Mr Vara
A lot of questions were asked, and I would like to have the opportunity to address the issue of additional funds. I will give way to the hon. Lady in due course.
We need to recognise the £2.4 billion in surplus funds that housing associations have and the £2.2 billion that the 165 local authorities have in their housing revenue accounts. We should also remember the Government’s £10 billion debt guarantee scheme to support the delivery of new rental homes, and we are encouraging the supply of new homes with a £1 billion build to rent fund.
Mr Vara
I will not for the moment.
The Government remain committed to the delivery of 275,000 homes over the course of this Parliament. I remind Opposition Members that we have a track record of delivery—in the past five years we delivered more affordable homes than the Labour party did in 13 years of Government.
Several hon. Members rose—
The Chair
Order. The Minister is not giving way, and I would appreciate being able to listen to him without the conversations on both sides of the Committee Room.
Neil Coyle
The Minister used careful language—“most” and “many”—when talking about the financial robustness of housing associations. What distinction is made for those housing associations that are not in as strong a financial position? How will they be supported through a change that could see them lose significant sums?
Mr Vara
I appreciate that the hon. Gentleman is still reading the Bill, but when he gets further on he will find a subsequent clause that deals with exemptions, including local authorities or housing associations that might be in financial difficulty, and there are measures to deal with them.
To help further, the regulator will be on hand to assist housing associations in considering how they can deliver more efficiency and better value for money. My colleagues at the Department for Communities and Local Government continue to engage with all those concerned as they develop plans to meet the reductions. We acknowledge, however, that there might be some circumstances in which the reduction policy should not apply. Clause 20 therefore provides some statutory exceptions and for further provision to be set out in regulation. In clause 21 we have also allowed for circumstances in which the financial viability of a private registered provider might be jeopardised. In such circumstances a provider may apply to be exempt from the rent reductions; similar provision is made for local authorities.
As for the number of new homes being built, the Government remain absolutely committed to ensuring housing for those who cannot access the market, and we support the ongoing role that the housing association sector has to play in the supply of affordable housing, as well as driving more home ownership. There continues to be a role for housing associations in delivering the mix of housing supply that the country needs, as we have already seen with the delivery of 260,000 new affordable homes over the past five years. We are committed to delivering 275,000 homes by 2020.
We do not believe that there is a need for a plan or a report, as suggested in the amendments. Our approach is measured and will be good for tenants and taxpayers while building in safeguards for supported accommodation and the financial viability of private registered providers. On amendment 184, the Government have made a commitment to reduce rents for a period of four years from April 2016, which is made clear in clause 19 and the new schedule. I hope amendment 21 will be withdrawn.
Debbie Abrahams
The amendments have been drafted in consultation with a number of agencies, housing associations, the National Housing Federation and the Local Government Association. Moody’s has also criticised the Government’s measures. The Minister said that my right hon. Friend the Member for East Ham supports this measure, but he supports and has put his name to amendments 21 and 85.
Debbie Abrahams
Amendment 21 reflects the concern about the affordable homes building programme, which is why we have asked for a plan. We are not convinced that the Government will follow through, which is why I have moved the amendment.
On the other, more general points, I gently refer the Minister to the Government’s own data on house building performance, which were published this summer. Unfortunately, since 2010 the Government have presided over the lowest level of house building in peacetime since the ’20s—those are the Government’s own figures. I will not press the amendment but, again, I refer the Minister to the figures on affordable homes. We are really concerned about what is happening. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Mr Vara
I beg to move amendment 176, in clause 20, page 19, line 42, leave out paragraph (c) and insert—
‘(1A) Section 19 does not apply in relation to social housing that consists of or is included in a property if, where the property is subject to a mortgage or other arrangement under which it is security for the payment of a sum or sums—
(a) the mortgagee, or a person entitled under the arrangement to be in possession of the property, is in possession of the property,
(b) a receiver has been appointed by the mortgagee, by a person entitled under the arrangement to do so or by the court to receive the rents and profits of that property and that appointment is in force, or
(c) a person has been appointed under or because of the mortgage or the arrangement to administer or sell or otherwise dispose of the property and that appointment is in force.’
This amendment expands the exception from the rent reduction requirements in clause 19 so that it includes, as well as cases of a mortgagee in possession or a receiver appointed under a mortgage, cases where steps are taken under a different form of security to realise the security. See also amendment 177.
Mr Vara
The amendments relate to clause 20, which provides for an exception from the rent reduction requirements when a mortgagee takes possession of a property, or when a receiver is appointed by the mortgagee or the court, or where a property is sold by a mortgagee in possession or the receiver. This exception is intended to protect the value of stock held by all private registered provider landlords, to ensure that they can continue to use their assets as security for borrowing in the same way that applies in similar circumstances under the existing rent policy.
Our intention is that the rent reduction measures should be aligned as far as possible with existing policy on social housing, currently set out in the regulator of social housing’s rent standard guidance and the Government’s guidance for local authorities. Amendment 176 expands the exception from the rent reduction requirements in clause 19 so that it also includes cases where steps are taken to realise security under a different form of security, and where any person is appointed under a mortgage or different form of security arrangement to administer or sell the property.
Amendment 177 provides that the exception applicable to a sale by a mortgagee in possession or a receiver is not limited to the first person or body becoming successor in title of the registered provider on the sale or transfer of the property by a mortgagee or receiver, but extends to all subsequent purchasers or owners. It also expands the exception to cases in which the property is sold under a different form of security arrangement.
Amendment 149 clarifies that events for which the regulations may provide may include periods when the rent payable by a social tenant is temporarily reduced or waived. Such provision could be used to clarify how the rent reduction should apply when a registered provider has temporarily reduced or waived a tenant’s rent—for example, because they are making repairs to the property.
The details will be set out in the regulations. Without these amendments, there would be an impact on the private registered provider sector, potentially reducing the value of all social housing assets currently being used for security for borrowing, which would lead to a need for more security, and preventing them from borrowing more to build the homes that we need.
Debbie Abrahams
I should like to make a reference to my amendment, if I may.
Neil Coyle
In rising to speak to the amendment, I just want to say that I welcome the Minister’s commitment this morning to write to me so I can find out a bit more information. He suggested that I was trying to make a name for myself—I believe that was the term he used. I certainly do not intend to upset him in any way, not least because I understand he has a black belt in martial arts.
Neil Coyle
The commitment to providing information was linked to the amendment because we were talking about housing associations, representations and the discussions that the Department is having. It would be useful if the Minister, when answering in writing, could provide information on the number of housing associations that have been met; the numbers that indicated that they support the policy, especially those providing specified and supported accommodation; those that specifically outlined the risk to their business case of the policy going ahead; and any representations to the Department from organisations suggesting that they would be unable to provide specified accommodation. I would be grateful to receive that information. I do not expect an answer today.
We heard about specified accommodation in great detail from my hon. Friend the Member for Oldham East and Saddleworth, and from all the organisations that made representations—I am particularly grateful to Homeless Link, St Mungo’s Broadway, Shelter and Crisis. The amendment is designed to cover shared houses, hostels, refuges and self-contained accommodation owned by registered providers, and instances where housing-related support, including financial management, is provided.
St Mungo’s Broadway operates in my constituency. Of its residents—the people that it provides support to—52% have previously been rough sleepers, 72% have mental health needs, 44% have significant physical health problems and more than one in five have experienced violence or abuse from a family member or partner. That is the client group, to use the Department’s language, that we are talking about. The total number of units provided at the moment is around 105,000. My hon. Friend the Member for Bootle mentioned Riverside, which estimates that it provides about 4,600 units of that kind of accommodation. We are not talking about a huge number, but the measure would make the provision of the services and housing more difficult for those organisations.
The Homes and Communities Agency was mentioned earlier. It has estimated that investment in supported housing results in a net cost-benefit to the public purse of £640 million per year. Does the Minister have any information about how that cost-benefit analysis has been undertaken or about the risk to that cost-benefit if housing is put at risk? The cost to local authorities of rough sleeping is roughly £8,600 per person. That does not include any cost to the Department of Health, the Ministry of Justice or the Home Office—it is just the cost to local authorities. Getting this wrong and putting accommodation for vulnerable people at risk could have knock-on costs for all taxpayers.
The Department for Work and Pensions and the Department for Communities and Local Government have commissioned a review into supported accommodation to establish a better evidence base for future funding decisions. Would the Minister give an indication of where that review is at and why the Government are not prepared to wait for the outcome of that review before pressing on with the policy?
Riverside estimates that the cumulative cost of the policy to it would be about £100 million. It has said that
“a year on year reduction in rental income would make this element”—
the specified accommodation—
“of our business loss making”.
It would either have to subsidise from elsewhere or stop providing that accommodation.
St Mungo’s Broadway has said that
“the requirement to reduce rents in social housing in England by one per cent per year for four years will result in the loss of supported housing schemes for homeless and vulnerable people.”
It is saying categorically that it will be unable to provide some of the accommodation that it currently provides, and that there is a knock-on cost that the Government have not taken into account. As my hon. Friend the Member for Oldham East and Saddleworth has mentioned, St Mungo’s Broadway has said that it will lose £1.25 million by the end of this Parliament as a result of the annual rent reduction. The four housing associations that I have spoken to, which provide some of their accommodation in Bermondsey and Old Southwark, have said that collectively, the cost to them of the proposed policy would be more than £180 million during the lifetime of this Parliament alone.
Mr Vara
May I initially address the hon. Gentleman’s points, although I will of course write to him? As a caveat, I must say that we have lots of meetings with lots of organisations, and many have asked whether we could look at something differently. Policy is not reached purely on the basis of asking, “Do you agree with this, or don’t you?”. Instead, we make it clear that we propose to do something and that we have a Government mandate to do so, and we ask how we can do that so that we best accommodate others’ views. Matters are not clearcut, but I will certainly write to the hon. Gentleman.
The hon. Gentleman referred to the evidence review that the Government have commissioned on the specified accommodation and supported housing sectors to understand better the scale, shape and cost of the sector in England, Scotland and Wales. We hope that the findings will be available sometime next year.
I welcome the contributions to the debate, all of which have been heartfelt. I commend the hon. Member for Oldham East and Saddleworth for the measured way in which she put forward her arguments, and I have taken her points on board. I am very grateful that the amendment was selected, because it gives me the opportunity to set out what is in the Bill, and to explain why we cannot support the amendment. However, I hope that the hon. Lady will take comfort from my remarks.
We recognise that the rent reduction measures introduce a significant change to existing rent policy. We have listened to comments and concerns about the housing of vulnerable groups, and I can offer the hon. Lady a number of assurances that mean that her amendment is unnecessary. First, in the light of this new policy, we will look to align as far as possible exceptions under the new policy with those that apply under the existing rent policy for social housing. That means that we intend to except from the rent reduction requirement the types of housing that are excepted from the rent standard. Those include specialised supported accommodation, which provides support for the most vulnerable people and which is developed in partnership with councils or the health service. Also excepted will be residential care homes and nursing homes. Clause 20(2) gives the Secretary of State for Communities and Local Government a power to set further exceptions should they be needed, to except that accommodation from rent reductions.
Clause 20(3) further clarifies the cases and circumstances that regulations may provide for, which include groups of tenants and types of accommodation.
Peter Dowd
I acknowledge what the Minister is saying, but I would ask him to cast the net more widely. For example, does he recognise that, under section 117 of the Mental Health Act 1983, if accommodation cannot be continued, provision becomes much more expensive because of a statutory requirement, notwithstanding the forthcoming amendments? That provision would be much more expensive if organisations could no longer provide it. The Government are taking money from Peter to pay Paul, but Paul is much more expensive.
Mr Vara
I take on board what the hon. Gentleman says, some of which I will address later when I talk about other forms of help, assistance and funding.
We have tabled amendments that provide the Secretary of State with powers to allow, by regulation, rent setting for new tenancies in supported housing at up to 10% above the formula. That is similar to the existing rent policy and standard practice. We believe that should help providers of supported accommodation for vulnerable people to continue to provide that important housing. We also acknowledge that there might be some circumstances in which the financial viability of a private registered provider or a local authority could be jeopardised—something the hon. Member for Bermondsey and Old Southwark mentioned. In those cases, the providers could apply to be exempt from rent reductions.
Neil Coyle
It sounds like some of what the Minister is saying is likely to be welcome. Let me reiterate that the borough of Southwark is the biggest landlord in London. In bringing forward other exemptions, would the Minister be willing to meet my local authority to ensure that the most appropriate accommodation is exempted to best effect?
Mr Vara
I would of course be happy to meet the hon. Gentleman and anyone he wishes to bring to the meeting. What I would say is that we have been mindful of the fact that we cannot judge the situation as it is now. Where local authorities or housing associations find themselves in financial difficulty and their viability may be an issue, there are processes in place to ensure that the regulator works with them to make sure that things can be worked out. If it is felt necessary, then with the consent of the Secretary of State there can be alterations through a rent reduction, and organisations can make their case. However, we hope to set out in regulations the criteria that would be applied.
We intend to work with organisations—housing associations and local authorities—because we want to make this work. The change is not simply being imposed; we are consulting widely. The hon. Member for Oldham East and Saddleworth was right to say that there have been a number of amendments, and I repeat that that is a direct consequence of lots of organisations coming to us and saying, “Well, how about this?” We have taken what I think is a commendable decision, in that we have genuinely listened and tried to clarify what we thought we were aiming for. It was not clear enough for the people concerned, so we sought to clarify it.
It is important to get the balance right between reducing the burden on taxpayers and supporting the provision of housing for vulnerable people, as well as the balance between supporting the provision of that housing and treating fairly those older or disabled tenants who pay their own rent and who should benefit from the rent reductions, but will not do so if there is a blanket exemption.
When it comes to dealing with vulnerable older and disabled people, it is important to look at the wider context. As a Government, we are determined to protect the most vulnerable in society and help them to live independent lives, and assistance goes beyond what we are discussing today. Funding for supported housing is included in the wider settlement to councils. The Government continue to support local areas to meet their local needs by maximising funding flexibility. For example, in 2015-16, we are investing £5.3 billion in the better care fund to deliver faster and deeper integration of health and social care. This will enable councils to invest in early action to help people to live in their own homes for longer and help to prevent crisis, as well as supporting councils to work together more effectively, deliver better outcomes for less money and drive integration across all services.
The Government are also investing in specialised housing for older and disabled people through the £315 million care and support specialised housing fund. Phase 1 is expected to deliver over 4,000 homes by 2018; phase 2 was announced in February and will set aside up to £155 million in capital funding for the development of specialist housing to meet the needs of older people and adults with disabilities or known mental health issues.
Neil Coyle
My understanding is that the better care fund is entirely restricted to new projects, so it cannot help towards councils’ existing accommodation costs. Given that we know the waiting lists that councils across the country have, I am not convinced that the better care fund is the solution to the specific problem before us. At the same time, the Government are ending the independent living fund, leaving councils potentially significant new costs for providing residential care accommodation for disabled people who had previously been able to be supported in their own homes.
Mr Vara
I repeat that we should not look at this solely in the context of what we are discussing today; there is a wider picture here, and I have given details of the other moneys available alongside the 1% reduction we are discussing.
I repeat that the Government are committed to ensuring that the most vulnerable people are protected. Statutory homelessness is lower now than in 26 of the past 30 years, at less than half the peak it reached in 2004. This Government have increased spending further to prevent homelessness, making over £500 million available to help the most vulnerable in society. That has resulted in local authorities preventing 935,000 households from becoming homeless since 2010.
Neil Coyle
There is a brilliant charity in Bermondsey called UK Homes 4 Heroes, which supports former members of the armed forces. We have seen a dramatic rise in the number of former members of our armed forces sleeping rough in London. How will this specific policy help councils and others to better support those coming out of the armed forces, to prevent them from ending up sleeping rough, given what the Minister has just said?
Mr Vara
That issue commands huge respect across Government and on both sides of the political argument. There is discussion and debate across Government to make sure that brave men and women who are prepared to put their lives on the line for our safety and security get the best possible treatment. There are clearly still issues that need to be resolved. It is an ongoing debate. I am very aware of the situation to which the hon. Gentleman refers; there are RAF bases in my constituency, and I am only too aware of how we need to look after those people a lot better. We have made progress in the past five years, but we need to do more and should remain vigilant.
I believe that there are sufficient safeguards in place to ensure the continued financial viability of housing providers while balancing the need to support tenants who should benefit from a reduction in their rent. I urge the Opposition to withdraw the amendment.
Debbie Abrahams
I am grateful to the Minister for that positive response and look forward to the regulations he mentioned setting out the criteria on requests for exemptions that providers of supported housing may put to the regulator. I believe that the Minister recognises the dire situation those providers are in. I also thank my hon. Friend the Member for Bermondsey and Old Southwark, who provided us with the wider context about, for example, how the end of the independent living fund will affect local authorities’ provision for supported accommodation; that is very relevant.
I differ from the Minister in my interpretation of the homelessness situation at the moment. We can trade off figures, which I do not think is helpful. We need to move beyond that. I have the Government figures here, and in the past five years, for example, there has been an 840% increase in the number of families with children who have been declared homeless and are living in bed-and-breakfast accommodation. The situation is certainly not rosy. We have anecdotal evidence of that ourselves. However, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
With this it will be convenient to discuss Government amendments 155, 156, 161 and 162.
Mr Vara
We have recently been talking about exceptions and exemptions and it might be helpful if I clarify the position. We will set out the criteria for exceptions in the regulations. When we talk about exemptions, the financial viability conditions are in the Bill. We can also set out other conditions for an exemption in the regulations. I hope that that is helpful in drawing a distinction.
The amendments seek to introduce flexibility into the exemption process in relation to clause 19. Amendments 154 and 161 allow a direction to be made in relation to only some of the social housing that a private registered provider or a local authority have, ensuring that exemption can be targeted. Amendment 155 enables the regulator of social housing, the Homes and Communities Agency, to publish guidance on steps that a private registered provider should take before seeking an exemption. Amendments 156 and 162 give the Secretary of State power to prescribe conditions other than serious financial difficulties in which an exemption may be granted to a local authority.
Amendment 154, 155 and 161 recognise that exemption is a tool of last resort and, if needed, should be used in as targeted a way as possible. Amendments 156 and 162 provide for greater flexibility in the exemption regime.
Debbie Abrahams
I am grateful to the Minister for his clarification. We are talking about the financial viability of supported housing providers and, more broadly, housing associations. The Government are considering the problems that they face, so has there been any assessment of the housing providers whose viability could be threatened as a result of the measures? Will one be undertaken? I am grateful for the detail on the amendment, but it seems that implementation is already anticipated. Should there not be a step before that?
Mr Vara
We are not anticipating difficulty. We are trying to recognise what might happen in future, so we are making it absolutely clear that, although we propose a 1% reduction, where financial viability is threatened, there are measures in place to deal with it.
We must recognise that the regulator is there to help, assist and advise. Its job is to assist, but as a default mechanism we have those provisions. However, as far as I am aware, we do not anticipate anyone having difficulty. I reiterate that we are confident that housing associations and local authorities are robust organisations that can deal with the 1% reduction. It must be considered in the wider context. Individuals and other organisations throughout the country are having to put up with difficulties. We are asking for a 1% reduction. I repeat the comments made by David Orr, chief executive of the National Housing Federation. I will not repeat the whole quote, as I gave it earlier, but simply two lines. He said that
“in truth, there is no sector anywhere that is not still capable of making further efficiency savings. That is as true in our sector as it is anywhere else.––[Official Report, Welfare Reform and Work Public Bill Committee, 15 September 2015; c. 91, Q144.]
Amendment 154 agreed to.
Amendments made: 155, in clause 21, page 21, line 11, at end insert—
“( ) The regulator may publish a document about the measures that the regulator considers could be taken by a private registered provider to comply with section 19 and to avoid jeopardising its financial viability.”
This amendment enables the Regulator of Social Housing to publish documents relating to the condition in clause 21(4).
Amendment 156, in clause 21, page 21, line 13, after “(9)” insert “or (9A)”.
This amendment and amendment 162 provide that the Secretary of State may issue a direction if an alternative condition is met, that is, a condition that the circumstances of the local authority must satisfy requirements prescribed in regulations by the Secretary of State.
Amendment 157, in clause 21, page 21, line 18, after “for” insert ““at least”.
This amendment and amendment 158 permit a local authority to which a direction in the terms of clause 21(7)(b) is issued to make a reduction in rent, instead of keeping the rent the same.
Amendment 158, in clause 21, page 21, line 19, for “the same as” substitute “no more than”.
Amendment 159, in clause 21, page 21, line 21, after “required” insert “at least”.
This amendment permits a local authority to which a direction in the terms of clause 21(7)(c) is issued to make a greater reduction in rent than the reduction specified in the direction.
Amendment 160, in clause 21, page 21, line 22, at end insert—
“(d) a direction that section19 is to have effect in relation to a local authority specified in the direction as if section19(1) required the authority to secure that the amount of rent payable by tenants of their social housing increased by no more than the percentage specified in the direction.”
This amendment provides for directions that exempt a local authority from the rent reduction requirements in clause 19 but limit what increase in rent the authority may impose.
Amendment 161, in clause 21, page 21, line 24, at end insert—
“, and
(b) the social housing in relation to which it is to have effect.”
This amendment enables a direction to affect only some social housing of a local authority.
Amendment 162, in clause 21, page 21, line 27, at end insert—
“(9A) The condition in this subsection is that the circumstances of the local authority satisfy requirements prescribed in regulations made by the Secretary of State.”
Amendment 179, in clause 21, page 21, line 31, leave out subsection (11).—(Guy Opperman.)
This amendment is consequential on amendment NC22.
Question put, That the clause, as amended, stand part of the Bill.
HM Courts and Tribunal Service
Shailesh Vara Excerpts(9 years, 2 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Justice (Mr Shailesh Vara)
In the last financial year HM Courts and Tribunals Service (HMCTS) collected over £550 million of fines, other financial impositions, fixed penalties and orders, and that money has helped to fund vital services for taxpayers.
To build on this work, in July 2013 my Department began a procurement competition for a new provider of criminal court compliance and enforcement services, and a preferred bidder was identified in January 2015.
Following reconsideration of the Department’s requirements, we have decided that outsourcing these services to a single supplier is not the best option for HM Courts and Tribunals Service. This decision is based on the need to ensure that any contract we let completely meets our requirements, provides best value for the taxpayer and complies with procurement law.
Ministers have set out the importance of reforming HMCTS to provide a modern and efficient service for society. Improving compliance and enforcement services will continue to form a key part of that work. We believe that in-house modernisation is the best option for HMCTS.
[HCWS237]
Priorities on Pensions
Shailesh Vara Excerpts(9 years, 2 months ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
My noble Friend the Minister of State, Department for Work and Pensions (Baroness Altmann) has made the following written statement:
“The new state pension comes into payment from April 6 next year. This reform will bring much-needed clarity to a system that few people truly understand, and will reduce the need for pensioner means-testing. Alongside this, over 5.4 million employees have been enrolled into a workplace pension by around 60,000 employers, dramatically increasing the number of people saving for later life. However, they represent around only three per cent of employers as large and medium-sized firms were first to implement automatic enrolment.
The Government’s priorities are to carry through those important reforms to ensure they are a success. This means new state pension being delivered as smoothly as possible and small and micro employers getting the help and support they need as they meet their automatic enrolment duties.
Government and the pensions industry are also currently working through the changes following from the new pension flexibilities which allow scheme members to have more freedom and choice about how and when they withdraw their pension savings.
All these reforms will increase the number of people saving into workplace pensions, introduce new freedoms allowing savers to access their cash, and implement a new state pension that will be far easier to understand in the future. However, we are conscious of the need to ensure Government, providers, employers and members are able to focus on these changes to ensure their success.
That is why we have decided that the time is not right to implement defined ambition, collective benefits and automatic transfers. The time is not right to ask the pensions industry to absorb the new swathe of regulation that would be needed to make such further reforms work effectively. The market needs time and space to adjust to the other reforms underway and these areas will be revisited once there has been an opportunity for that to happen”.
[HCWS245]
Welfare Reform and Work Bill (Ninth sitting)
Shailesh Vara Excerpts(9 years, 2 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Hannah Bardell (Livingston) (SNP)
It is a pleasure to serve under your chairmanship once again, Mr Owen. The Scottish National party supports the intentions behind Labour’s amendment 19, because access to support must be available within 13 weeks and not the proposed 39 weeks.
According to Shelter, around £300 million per annum in SMI is “small” in terms of welfare spending, but it is very important:
“It covers the interest payments for around 200,000 home owners on their mortgages, meaning that they are less likely to be forced into having their home repossessed and, ultimately, to end up homeless.”
Shelter also says that SMI has
“tight eligibility criteria and is restricted to very low income households who are out of work, pensioners or sick or disabled. In fact, the overwhelming majority of recipients of SMI either qualify through pension credit or employment and support allowance.”
They are already some of the most vulnerable benefit claimants, so adding a further burden by turning the benefit into a loan is essentially giving with one hand and taking away with the other. We do not support the Government’s attack on the weakest by forcing more and more vulnerable people to take on the added burden of debt just to get out of hard times. How can we define that as welfare?
Amendment 19 would ensure a waiting period for applications by eligible claimants for support with mortgage interest of 13 weeks. That would offer protection against the Government increasing the waiting period, as they have done with statutory instrument No. 1647, which will increase the waiting period to 39 weeks from 1 April 2016. The explanatory memorandum to the instrument states:
“The provisions in this instrument introduce a 39 week waiting period for all working age claimants who are required to serve a waiting period before housing costs, including payment of eligible mortgage interest, can be paid.”
We do not want yet more financial pressure on benefit claimants due to having to wait more than half a year to receive financial help with their mortgage interest payments, let alone the added pressure of that financial help pushing them into further long-term debt when that benefit is turned into a loan. Has the Minister had discussions with the Scottish Government on the implications of that change from support to loan, which will impact the people of Scotland by pushing them into further debt? I would be grateful for information on that.
The Parliamentary Under-Secretary of State for Work and Pensions (Mr Shailesh Vara)
It is a pleasure, Mr Owen, to serve under your chairmanship. First, may I clarify one point concerning the Council of Mortgage Lenders? The other day, I spoke in good faith and on the basis of the many regular meetings that we have with the CML during which the issue has not been raised at all. Indeed, Paul Smee, its director general, did not raise the issue when he was in a meeting with my ministerial colleague, the noble Lord Freud, when they met in early September. Although the CML has definitely said that it believes that the 39-week waiting period will drive repossessions, they are unable to quantify numbers of repossessions. We will continue to work with the CML to assess any such impact in terms of repossessions but we do not believe that these will be significant.
Mr Vara
I have said all I am going to say on that. I would like to make progress as there is a lot to be said this morning. I would rather not get bogged down on issues on which I have made proper statement.
Claimants receiving income-related benefits may claim help towards the cost of their mortgage interest payments. Other than those receiving state pension credit, claimants have to serve a waiting period before the entitlement to help with mortgage interest begins. During the period of 1997 to 2009—the announcement was made in 2008 but the actual impact was in 2009—the waiting period for the majority of working age claimants was 39 weeks. In January 2009, the then Government introduced temporary arrangements reducing the period to 13 weeks, specifically to deal with the economic circumstances and to give additional protection to those who lost their jobs during the recession. At the same time, the maximum value of the mortgage for which support was available—the capital limit—was doubled to £200,000.
It was announced in the summer Budget that, from April 2016, the waiting period will return to the pre-recession length of 39 weeks, but it is important to remember and to note that the higher capital limit of £200,000 will be maintained. Given that the 39-week period was perfectly satisfactory from 1997 to 2009, and that the reduction was introduced purely on a temporary basis to deal with the then economic circumstances, it is right and proper that we should now revert to the former system.
We are all aware that the economy is on the rise and of the huge benefit that the employment market has had. We have record employment levels. I pay tribute to my right hon. Friend the Minister for Employment for her contribution to ensuring the record level of employment that we have at the moment.
The amendment would remove the current broad powers in the Bill that allow the waiting period for SMI to be set out in regulations, replacing them with a narrowly defined 13-week waiting period.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The Government’s own impact assessment says that people of pension age are more likely to be affected by the change in SMI. Has there been an assessment to look at the impact that it may have on, for example, their ability to pay social care costs, and at what overlap there may be as a result of having an ageing population?
Mr Vara
May I first pay tribute to the hon. Lady? She has a formidable reputation in health matters, particularly in relation to elderly people. I understand that she co-chairs at least one all-party parliamentary group and chairs another. She comes with a formidable background and I take what she says with considerable respect.
It is important to remember that many pensioners will have had the assets for many years. That is actually the case. During that period, those assets will have appreciated considerably. What we are saying is that the loan will be paid only when the home is eventually sold. If there is no equity left, there will be nothing to pay back to the state. The provision is reasonable given that there are taxpayers who do not own their own home but whose taxes are being used to help others—pensioners or not—with a substantial asset whose value is continuing to appreciate and rise in value thanks to those taxes. As I said, no payment will be required until the property is sold at the end. If there is a balance left, that will be written off.
Emily Thornberry
I beg to move amendment 134, in clause 16, page 15, line 34, leave out subsection (11) and insert—
‘(11) A statutory instrument containing regulations under this section may not be made unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament.’
To require that regulations under this section must be subject to the affirmative resolution procedure.
The proposed extension of the waiting period is, in my view, just the tip of the iceberg of what we do not know about how the switch from benefit to loan will work in practice. As is often the case with this Government, the Bill contains little detail. The operation of the proposed scheme will instead be set out in regulations, which the Government intend to slip through on the nod, hoping that no one will be paying any attention. Amendment 134 would require that the regulations on the details of the proposed loan scheme under the clause be subject to the affirmative procedure. It is all about democracy.
As drafted, the Bill will allow the Government to implement significant changes to the scheme, including such important details as the loan provider, the rate of interest payable on the loan itself, the terms of repayment and any additional charges and fees, without the need to seek parliamentary approval. That is pretty extraordinary. Amendment 134 would require the regulations to be subject to a debate and a vote in both Houses, so that we may scrutinise the proposals properly and understand what we are being asked to agree to.
I have touched on some of the important details that have been left out of the Bill, some of which I wish to explore further to give a sense of the scale of the issue. The first and most immediately obvious question is, who will provide the loans? In 2011 the Department for Work and Pensions, when it called for evidence, indicated that it would be responsible for administering the scheme, but things seem to have changed. The Bill lists a number of potential providers, including deposit-taking institutions, insurers and local authorities, of which the DWP is not one. So we are left to guess.
The Bill also indicates that administrative fees and interest charges will be payable on loans, but it does not say what will be chargeable or how the rates of interest might be set. It seems ironic, and not at all fair, that when the Government are proposing that loans for mortgage interest should be subject to repayment with interest we do not have the detail in the Bill, so we are not in a position to make an informed judgment.
Another unanswered question is to do with the interaction between the proposed scheme and universal credit. If people continue to receive support for housing costs as part of their monthly universal credit payment, the Government are creating a recipe for confusion by telling claimants that part of their benefit has become an interest-bearing loan that they must at some point repay. We seem to be going in all sorts of different directions at once, and that would seem to undermine one of the core arguments that Ministers put forward in favour of universal credit, which is—I do not know if you remember this, Mr Owen, but we hear it all the time—that it is supposed to be simple. Well, that is not simple.
The Bill is silent on a number of other issues, many of them more complex, that will inevitably arise from the transition period. There are, for example, many features of support for mortgage interest that might make sense for a means-tested benefit, but which seem less appropriate when imposed as a condition for receipt of a loan. Time-limiting claims for those on jobseeker’s allowance is an obvious example. Putting a ceiling on the amount of eligible capital for which SMI is payable is another. The Government do not make it clear whether either of those features will be carried over to the loans that will replace SMI, nor have they made it clear what additional costs the loans may be able to cover.
The Minister recently tabled a number of amendments—we have just heard one—that will change the wording of the Bill to specify that loans will be able to cover “owner-occupier payments” and not only mortgage interest. It is as if a light has just gone on above the Minister’s head and he realises that more ought to be covered. It seems to reflect the Government’s realisation that the scheme has the scope to cover additional costs, such as essential repairs and service charges. For example, some of my pensioners in Bunhill might find themselves in difficulty and needing to go for SMI, but they also have huge service charges for the lifts and cleaning—many of them complain that the service charge is one of the biggest costs that they have—so the Government, at the last minute, have realised that they have to do something about that as well.
If that is the case, the recognition came late in the day, and it indicates that the full implications of the proposal are still not fully thought through. Here we are, in Committee, discussing such an important change—a change of principle, whereby we are asking people to take out a loan in order to pay off the interest on a loan—and the Government have simply not thought it through. We are talking about some of the most vulnerable people, and frankly, leaving aside the fact that the principle is wrong and the measure will not save a great deal of money, to add insult to injury, the Government have not even thought it out.
Finally, the Bill leaves out the crucial issue of the rate at which the loans will be payable. If the payments are too low to cover the full amount of interest owed—for example, if the Government, as they have suggested, use the Bank of England’s standard interest rate as a benchmark—the system will not serve its purpose, and it will increase the incentive for people to abandon their mortgages altogether. I do not know whether the Government have thought of that.
Whatever rate the Government settle on, that important detail deserves more in-depth discussion than the Committee has time for. It simply is not good governance for Ministers to pass legislation that allows them to make changes of such consequence with so little accountability. I hope, therefore, that Government Members will agree that Ministers need to be more forthcoming about their intentions on these issues before the Bill moves forward.
Mr Vara
The amendment would require the regulations made under clause 16 to be subject to the affirmative resolution procedure and to be approved by each House of Parliament. That is not necessary, since the fundamental principles we wish to achieve will have been clearly laid out during the Bill’s passage and debated in Parliament.
We had a call for evidence between December 2011 and February 2012. That is a number of years ago, and there has been debate since then. We have had oral evidence. It was between December 2011 and February 2012 that the idea of providing support for mortgage interest payments through a loan was first introduced, and the majority of responses were positive.
Emily Thornberry
I appreciate that the Minister is saying that he will be able to push the principle through using his majority, but the point I am trying to make is that the details make no sense, and the Government have not thought them through. Given that we have no indication of how the system will work, we need an opportunity to scrutinise it further in a Delegated Legislation Committee so that, frankly, we can give the Government a hand, because they are making a pig’s ear of this. The Minister talked about the call for evidence in 2011 and 2012, but the can was kicked down the road for many years, until after the Conservative party won the election, at which point the Government started pushing these things through without thinking through the consequences.
Mr Vara
There is a fundamental distinction between pushing forward an ideology, while ignoring everything and anything that may be put forward, no matter how sensible it is, and deciding to consider the evidence before the Committee and recognise the reality of Government—that it is important to have flexibility and regulations. That is why Departments across Whitehall have regulations: to be able to deal with the minutiae. It is also important to have that facility so that we can deal with things quickly and take a flexible attitude, rather than go through the cumbersome and time-consuming procedure of having everything approved in Parliament. That is simply not the way the real world works; it was not the way the Labour Government operated, it certainly was not the way the coalition Government operated, and it is certainly not the case now.
Debbie Abrahams
Can I push the Minister a little on interest rates and ask him to reflect on the experience with student loans? They started off in 2010 at a base rate, but they have now gone on to commercial rates. Allowing the issues in the Bill to be fully debated involves important considerations of transparency and openness.
Mr Vara
The hon. Lady makes a very good point, and she gives me the opportunity to make it clear that, unlike students, almost all the people we are talking about have an asset—a property. Therefore, the two groups are fundamentally different. The interest rate we charge will be what we will have paid to borrow the money, and that will depend on the gilt rates at the time. It is as straightforward as that.
The Government recognise the importance of helping owner-occupiers in times of need, and they remain committed to doing so. We are simply changing the nature of the support we provide so that in future the support will be paid to claimants in the form of a recoverable loan. We will recover the loan only when the house is sold, or earlier if individuals’ circumstances change and they are in a position to pay the money back.
Emily Thornberry
I beg to move amendment 135, in clause 17, page 16, line 13, at end insert—
‘(4) The regulations must make provision for persons applying for a loan to have access to financial advice, which must be provided free of charge by an organisation independent of the qualifying lender.’
To require that those applying for a loan must have access to free and impartial financial advice which is independent of the lender to whom the application is made.
The amendment stands for itself; it is not complicated. It requires those applying for a loan to have access to free and impartial financial advice independent of the lender to whom the application is made. Given that the Department will not be dealing with the loans and will be asking various other organisations to be responsible for such loans, the amendment is consistent with the principle of having free and independent advice. When the coalition Government decided that people should be given access to their pension pots to buy a Lamborghini, they agreed that there should be independent advice before people made such important decisions, so we ask for poor pensioners and disabled people to be given independent advice before they are asked to take out loans.
Mr Vara
Clause 17 allows the Secretary of State to set out in regulations further details regarding the support for mortgage interest loan scheme, including the Secretary of State’s ability to contract out certain functions of the scheme to a third party, such as for the provision of financial advice. To be clear, the Department will administer and provide loans, but the advice and recovery will be provided by a third party, which will be chosen in an open and transparent way so that everyone can see that an independent arm’s length body is providing that advice.
Emily Thornberry
That is very interesting and helpful. Will the advice be free?
Mr Vara
That is a matter to be decided.
The hon. Lady’s amendment seeks to set parameters for the advice: who will provide it, and what it will entail. It is the Government’s intention that the regulations should set out the details of that advice, including the type of provider that we will appoint. We also intend for the advice provided to be broad, including available options other than taking out a loan, the implications of taking out a loan and whether people need to speak to potential beneficiaries of their will who might be affected by their decision, so that they can make a fully informed decision about whether to take out a loan. The amendment is restrictive, as it would prevent the Government from providing the broad advice necessary to claimants when they are considering taking out a loan. I hope that the hon. Lady will withdraw it.
Emily Thornberry
I will, but we will want to hear before Report whether the advice will be free. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Emily Thornberry
Amendment 136 asks for a 12-month grace period. The Government say that there will be a transitional period, and we think it right for existing claimants to be given 12 months in which to work out the implications of the new necessity of taking out a loan in order to pay off another loan. They need a certain period to get their house in order—to coin a phrase—and to get themselves proper advice. We ask for a 12-month grace period before they have to take out a loan.
Mr Vara
The hon. Lady’s amendment would allow existing claimants who are receiving help with the cost of their mortgage interest payments as a benefit to continue to receive that help for at least a year after the new loan scheme has been introduced by regulations. That would effectively allow existing claimants a grace period before they are required to decide whether to continue receiving support for their mortgage interest as a loan. Given that many such claimants have received help with their mortgage as a benefit for some time—in many cases, decades—it would simply be unfair to continue to provide them with help in the form of a benefit while new claimants are offered loans for the same purpose.
Emily Thornberry
Can the Minister point us to the evidence showing that some people have been receiving assistance for decades?
Mr Vara
I do not have that evidence to hand, but I am quite sure, given that the Department is responsible for paying the benefit, that it is there, and therefore that the measure is based on evidence. We all know people who have been on benefits for many years, in many cases for very good reasons, but it is a fact that many people out there have been on benefits for many years, so we must accept the reality of the situation.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
The Minister has suggested that the evidence exists but he does not have it to hand. Will he make some of it available to the Committee?
Mr Vara
First, I pay tribute to the hon. Gentleman, who has a distinguished record in the charitable sector. I take this opportunity to commend him and the hon. Member for Birmingham, Yardley, who also has a charitable background. Many people do such work but it gets very little recognition, so I am happy to give that recognition both to colleagues and to the hundreds of thousands of people working in that sector.
As for the evidence, it is abundantly clear that many millions of people are claiming benefit. It is also a fact that, in the election last May, this Government were given a mandate by the people of this country to put forward these reductions and cuts.
Debbie Abrahams
With respect, it is quite clear that the scale of the cuts being proposed was not one of the issues put to the public. The proposed cuts were published only after the general election, so for the record that is a very misleading statement to make—[Interruption.]
The Chair
Order. I am sure the Minister will correct things if he has unintentionally misled the Committee.
Mr Vara
I have not misled the Committee. It is a fact that the Government said that we would make £12 billion of reductions from the welfare budget, and it was on that basis that the people of this country, in their millions, voted for this Government as a majority Government and gave us the mandate to make those £12 billion of reductions in the welfare budget, as we are doing.
Neil Coyle
The Prime Minister also gave a commitment not to reduce tax credits, so I look forward to that commitment being implemented by the Government. To return to my previous point, where is the evidence for this Committee about decades-long benefit entitlement? [Interruption.]
The Chair
Order. The Minister has been asked a specific question. I do not want the debate to broaden out to the topic of the general election.
The Chair
Order. I am sure that the Minister is going to come back to the provisions before us.
The Chair
Order. Will the Minister take his seat for two seconds, please? Our debate is, I feel, repeating the general election debate. We have specific measures in front of us, and the Minister has been asked a question about evidence. If he could deal with that then move on, that would be useful.
Mr Vara
I have answered the question. It is a fact that millions of people are claiming benefits. We said specifically in our manifesto that there would be £12 billion of cuts. That is what the measure is all about.
Government new clause 13 will enable the Government to put in place, by way of regulations, a framework to support the transition from the current provision of support for mortgage interest as part of the individual’s benefit entitlement to the new system of loans. It is a simple transaction: instead of a benefit, it becomes a loan. The new clause will ensure that the Government can manage the introduction of support for mortgage interest as a loan—in particular, the migration to the new system of those currently receiving support for mortgage interest as a benefit—as they see fit.
In particular, the new clause includes provisions to allow a phased approach to the introduction of support for mortgage interest loans should that prove necessary. It makes it clear that regulations may make provisions about the timing of the transition to the loan system both for new claims and for individuals currently receiving support for mortgage interest as a benefit, and provides that that can be achieved by the issuing of notices to those individuals. Notices may be issued by reference to the area in which an individual lives or the type of qualifying benefit that the individual receives.
Our intention is that existing claimants should be notified well in advance both of the implementation of the changes and of when they will be affected, and that they should be provided with financial advice so that they are aware of the alternatives to receiving a loan and the implications of doing so. Advice will include discussion of the claimant’s financial position, both now and in future, confirming their understanding of the terms of the loan and encouraging them to engage with any beneficiaries there may be in due course.
Hannah Bardell
I will make this brief. In Scotland, people did not vote for the Conservative manifesto or the Conservatives’ austerity cuts—more than 50% voted for the SNP. However, on the specific point I asked about—I apologise if I missed the answer—what discussions has the Minister had on the clause with the Scottish Government? It will affect people in Scotland.
Mr Vara
I will happily answer that question. There has been contact at official level, and the engagement will certainly continue with the Administration in Scotland.
Government amendment 129 is a straightforward technical amendment, which will ensure that new clause 13 has the same extent as clauses 16 and 17 and apply to England, Wales and Scotland. I hope the hon. Member for Islington South and Finsbury will withdraw the amendment and accept Government new clause 13 and Government amendment 129.
Emily Thornberry
I have nothing to add, and I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: 122, in clause 17, page 16, line 16, leave out “pay mortgage interest” and insert “make owner-occupier payments”.
Amendment 123, in clause 17, page 16, line 19, leave out “pay mortgage interest” and insert “make owner-occupier payments”.
Amendment 124, in clause 17, page 16, line 28, leave out
“in respect of the mortgage interest”
and insert
“in relation to which the amount is paid”.
Amendment 125, in clause 17, page 16, line 39, leave out from “is” to end of line 40 and insert
“liable to make owner-occupier payments under more than one agreement to make such payments.”
Amendment 126, in clause 17, page 16, line 46, leave out subsection (7).
Amendment 127, in clause 17, page 17, leave out lines 29 to 32.—(Guy Opperman.)
This amendment removes definitions that are no longer needed for clause 17.
Question put, That the clause, as amended, stand part of the Bill.
Mr Vara
We have heard a lengthy and passionate speech, the bottom line of which is, “Can we make an exception for pensioners?” As I have said before, we are talking about pensioners who have an asset, probably the biggest and most valuable asset that they have—the biggest asset that most people have is their home. That asset will appreciate in value. There is an element of fairness involved in the measure, as well as ensuring that we make some savings, and it will save £250 million.
I come back to the fundamental point: we are talking about individuals who have an asset that is being subsidised by the taxpayer. Many of those taxpayers do not have such an asset of their own. It is important to recognise that the proposed system is almost the same as the existing system, save that the benefit is converted into a loan that is payable on sale of the valuable asset or, to the extent that there is nothing left in the equity, the Government will write off the balance. All the care, attention and other benefits that pensioners receive will continue.
Emily Thornberry
I hear what the Minister is saying, but his difficulty is that it flies in the face of what the Government are doing for people who are being helped to buy their housing association homes, a measure that will cost £11.6 billion. People—taxpayers—who do not own their own homes are contributing to the £11.6 billion pot that will help housing association tenants to buy. SMI is chickenfeed compared with the amount of money that the Government are using to subsidise that.
Mr Vara
If £250 million is chickenfeed, to quote what the hon. Lady said, I am afraid that people reading our proceedings in Hansard will take a deep breath and say, “This is what those people think of £0.25 billion.” The consequence of several such chickenfeed decisions is the mess that the country is in now.
Neil Coyle
Given what the Minister has said about the economic competence of the Government before last, will he remind us of the savings projected for employment and support allowance and housing benefit in the previous Parliament and whether they were met?
Mr Vara
I do not have those figures to hand, but I am happy to obtain them and write to the hon. Gentleman. He is seeking to make a name for himself. On Tuesday he sought to do so by calling other Members names. Today he seeks to be clever by asking questions, which are important, but which he knows will get a written answer.
The amendment will not make a difference. This is all about fairness.
Debbie Abrahams
I want to push the Minister again. The context of the clause is so important given that the Government have reneged on their commitment to cap social care costs. There has been no assessment of that. During the summer, the Government said that they would not be pushing forward with the Dilnot figures—actually, slightly different figures from the Dilnot ones—and the cap on care costs of £70,000-odd. That is not going to happen. We can add all that together, but it does not seem to have been considered at all by the Government.
Mr Vara
It has been considered. There will be a minimal overlap between the DWP loans and the Department of Health deferred payment arrangements for social care. Those people expected to avail themselves of a deferred social care payment are likely to be mortgage-free or to have income levels above the benefit threshold and so would not qualify for SMI loans. [Interruption.] We will have to agree to disagree. Simply, the bottom line is that the measure is about fairness—fairness for taxpayers. We have to recognise that pensioners have an asset that appreciates, although they are not expected to make any repayment until that asset is sold.
Emily Thornberry
The answers we have heard are profoundly disappointing, and they will be disappointing to the most vulnerable pensioners throughout the country who have paid into a system and who deserve better from the Government.
The Chair
With this it will be convenient to discuss Government amendments 142, 143, 145, 146, 170, 173, and 163 to 168.
Mr Vara
The social rent clauses relate to the Government’s commitment to achieve a reduction in rents for social housing of 1% a year over four years. That will be good for the tenants and for the taxpayer, saving £1.445 billion by 2020-21. The amendments are the consequence of the Government listening to points made since the Bill was published by social landlords, local government and housing bodies, among others. We hope our amendments address some of the issues raised. The amendments in the group are either concerned with issues of clarification or make small drafting changes.
Amendments 141 and 143 clarify that the 1% rent reduction applies in each relevant year, which is to say, each of the four years from 2016. Amendments 142 and 146, taken together, clarify that the reduction relates to the amount of rent that is payable by a tenant in respect of a year—not the amount that is actually paid by the tenant, which is to recognise the reality that those figures might differ. Amendment 145 is a minor drafting point to clarify that the “amount” relates to the “amount of rent”. Amendment 170 is to simplify the drafting of clause 19 and amendment 173 is a drafting change to the clause to provide that a relevant year for a private registered provider whose practice is not an April start to a rent year will be determined in relation to the rent practice for the number of tenancies, not tenants.
Amendment 163 deals with the potential failures of providers to comply with the clause. It seeks to give the regulator of social housing the appropriate grounds on which to exercise monitoring and enforcement powers. With this amendment we have had regard to how the Housing and Regeneration Act 2008 established such powers and the need to avoid any confusion in how the regulator should exercise its power.
Neil Coyle
The Minister mentioned that he had had meetings with or representations from social housing associations. Will he clarify how many housing associations supported the measures proposed by the Government? How many housing associations have outlined to the Minister and the Department the risk that they might have to close some of the housing they provide as a result of the measure?
Mr Vara
Let me put things into context. We have spoken with a lot of organisations—I have a list at the back of my file and am happy to read out some of the names if necessary. The context of the measure is that it is part of the Government’s £12 billion welfare reduction. We made that absolutely clear to the country at the time of the general election. The people of the country voted democratically, in their millions, and we have a mandate to make those cuts. That is the reality of the position, which might be something that the Opposition do not like—
Mr Vara
I will not give way for the moment; I will finish my answer. The reality is that that is the position.
We have, however, spoken with a lot of people. I simply refer to the comments made by David Orr, the chief executive of the National Housing Federation, when he give oral evidence before the Committee. Most of us were at that sitting on Tuesday 15 September 2015. In response to a question from my hon. Friend the Member for Sutton and Cheam, Mr Orr said:
“I think that, in truth, there is no sector anywhere that is not still capable of making further efficiency savings. That is as true in our sector as it is anywhere else.”
Neil Coyle
Riverside Housing Association has said that
“a year on year rent reduction would make this element of our business loss making.”
St Mungo’s has said that
“the requirement to reduce rents in social housing in England by one per cent per year for four years will result in the loss of supported housing schemes for homeless and vulnerable people.”
The Homes and Communities Agency has estimated that those services save the taxpayer £640 million per year. Where is the saving in the longer term if those services do not exist?
Mr Vara
I am sorry that the hon. Gentleman was so keen to ask his question and so busy thinking about it that he paid no attention to what I was saying. He referred to one organisation. I referred to the comments of the chief executive of the National Housing Federation. We have done our homework, and estimate that we will save nearly £1.5 billion, as I have said.
Amendment 163 provides that a failure or risk of failure to comply with clause 19 is not to be, of itself, a ground for exercising certain monitoring and enforcement powers under part 2 of the 2008 Act, by removing clause 22(1) and (2) from the Bill as introduced. The practical effect of the amendment is that, before exercising those powers, the regulator must satisfy the specific grounds relevant to each power in chapters 6 and 7 of the 2008 Act, as amended by clause 22(3) to (8) of the Bill. Amendments 164 to 168 insert the correct title of the Bill into certain provisions.
Debbie Abrahams
This is my first opportunity to say that it is lovely to see you in the Chair today, Mr Owen. I will speak more fully on the clause when we discuss the Opposition amendments, but I will comment on this first group of amendments. With respect to the Minister, the Government have tabled 42—I have just counted them—amendments, so we can hardly say that they have done their homework. I am afraid that that reflects the nature of the Bill as a whole, which has been made up on the hoof. There has been no thorough assessment. I will go through my concerns about the lack of assessment and the evidence we have heard about today on the impact the Bill will have not just on the viability of housing associations but on their ability to provide affordable housing.
The Minister quoted the National Housing Federation. Housing associations have been working incredibly hard to ensure that they have a going concern and are able to afford to invest in the development of affordable housing. One issue with the clause is that it would threaten their viability and ability to borrow at low interest rates. Moody’s, the credit rating agency for the 44 social landlords, has said:
“A traditional credit strength of English [housing associations] has been the predictability of the policy environment…This stability has been eroded by the sudden removal of the rent-setting formula, which was preceded by limited consultation.”
If anything, the measure will make it even harder. I will speak more fully on the implications, not just for housing associations.
Debbie Abrahams
My hon. Friend makes a very good point. I am indeed aware of that. When preparing for this part of the Bill, I was inundated with concerns from my local housing associations about what it will mean for their bottom line and how it will affect their ability to build. Later this afternoon, I will go over what the potential loss of income means for housing associations and local government.
Mr Vara
I simply say to the hon. Lady that we have done what Governments are often accused of not doing: we have listened. Since the Bill was published, we engaged with the relevant communities and stakeholders and listened to their concerns. As will become apparent as the debate progresses, we have made changes that will clarify the position better for those concerned.
I am sorry if the Government, in listening to communities with a view to making the Bill better, are now being accused of doing wrong.
Amendment 141 agreed to.
Amendments made: 142, in clause 19, page 18, line 12, after first “in” insert “respect of”.
This amendment and amendment 146 make clear that the rent in question is the rent due to be paid in respect of a given period.
Amendment 143, in clause 19, page 18, line 12, leave out first “a” and insert “that”—(Guy Opperman.)
The Chair
With this it will be convenient to discuss Government amendments 169, 171, 147, 148, 150 to 153, and 157 to 160.
Mr Vara
This group of amendments deals with some important elements of the rent-setting process. Amendment 144 provides flexibility to registered providers to set reductions in rent of more than the required 1%.
Amendment 169 provides that the rent reductions must be applied on a pro rata basis if the tenant’s tenancy comes to an end part way through a relevant year. The same principle applies if the rent reduction provisions cease to apply to a tenant part way through a year because an exception under clause 20 or an exemption under clause 21 no longer applies. The amendment therefore makes it clear for registered providers that, in the circumstances specified, the rent reduction should apply on a pro rata basis.
Amendment 171 is an essential amendment that clarifies a number of important points. Proposed new subsection (3) provides that the amount payable by the tenant in the preceding 12 months is to be treated as having been the greater of: the amount that would have been payable if the rent at 8 July 2015 had applied during those 12 months; or, if the Secretary of State consents to the use of a different permitted review day, the amount of rent that would have been payable if the rent on the permitted review day had applied during those 12 months. We expect to use the flexibility to grant providers whose normal rent review date is after 8 July permission to use an alternative date as the reference date when calculating reductions, providing there is no evidence that the provider in question has manipulated his rent review date or implemented rent rises after 8 July 2015 in order to avoid the effects of the rent reduction.
Proposed new subsection (3A) clarifies that the Secretary of State’s consent for an alternative permitted review date may be for a particular case or for a description of cases. It is likely that the Secretary of State will issue a general consent covering typical cases. Proposed new subsection (3B) clarifies that, if a tenant was a tenant on 8 July 2015 and continues as a tenant of the same social housing until the beginning of the first relevant year, they will be treated, for the purpose of clause 19(1), as if they had been a tenant for the 12 months preceding the first relevant year—whether or not that is in fact the case—in order to establish the baseline of the rent on which the reductions will then apply.
Naz Shah (Bradford West) (Lab)
It is great pleasure to serve under your chairmanship, Mr Owen. Will the Minister highlight whether service charges are subject to the 1% cut and explain the process for introducing rent reductions for tenants when rents changes are not usually announced until April?
Mr Vara
My answers to those questions will come subsequently. There are other issues at hand and I am more than happy to address the matter raised by the hon. Member for Bradford West. That comes up in another section and I will happily deal with it then.
Amendments 147 and 148 clarify that clause 19(7), which allows an alternative relevant year, applies only to private registered providers. Unlike local authorities, whose budgeting and rent reviews are carried out on a traditional financial year cycle, starting 1 April, the housing association sector practice regarding rent review dates varies. Clause 19(7) therefore enables the use of a different relevant year, where the provider’s rent review date for the greater number of its tenancies is not 1 April. The amendments ensure that that subsection applies only to private registered providers, as local authorities do not need that flexibility.
Amendments 150 to 152 on private registered providers, and amendments 157 to 159 on local authorities, provide some important flexibility in the levels of permissible rent once an exemption has been granted by direction. They modify the provision in clause 21 for limited exemptions from the rent reduction requirement, which means that providers will have the flexibility to make a greater reduction in the rent than that set out in the direction.
Amendment l53, which is for private registered providers, and amendment 160, which is for local authorities, deal with circumstances where a registered provider may need to be able to increase rents but it is not appropriate to completely exempt the provider. They allow the regulator and the Secretary of State to issue a direction setting a maximum threshold up to which a provider can increase rents. The amendments give the regulator and the Secretary of State the tools they need to support registered providers in difficult circumstances while protecting hard-working tenants from excessive increases.
Debbie Abrahams
Again, these are technical amendments, which we have no specific comment on. My earlier remarks apply. It is good that the Government are in listening mode. It is just a shame that that was not done when the Bill was drafted. As I said, I will discuss my particular issues with the clause later this afternoon.
Mr Vara
I take on board the hon. Lady’s comments. Clearly, the matter will come in for further debate and I am sure that other members of the Committee will wish to comment. Mr Owen, I ask the forbearance of you and the Committee as a number of technical amendments need to be dealt with.
Amendment 144 agreed to.
Ordered, That further consideration be now adjourned—(Guy Opperman.)