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Social Security (Housing Costs Special Arrangements) (Amendment) Regulations 2009

My Lords, I support the Motion tabled by the noble Lord, Lord Freud. He is absolutely right to table it and all his questions are pertinent and important. Some may be technical but they go to the heart of enabling us to discharge our duty to scrutinise these very technical issues. In the atmosphere in which this original decision was taken—probably by the then Secretary of State, James Purnell—the instinct was right. The policy intention of trying to protect people from losing their homes was absolutely right. In 2008, when these decisions were originally taken, there was a possibility not only of people running the risk of losing their jobs but also of the tragedy being compounded by them losing their homes as a direct result of something not being done. Earlier evidence from earlier recessions suggests that that was a real risk. The ministerial decision was right at the time, but everything else after that seemed to go wrong. Maybe there is a point to be made about the flow of Ministers through the department. They hold office for 15 months, if they are Secretaries of State, and if they are lucky. We have had 20 or so Ministers for Pensions with almost the same number of Parliamentary Under-Secretaries. The advice I would give to the department, and one of the lessons that we learnt from this set of mistakes, is that the professionals in the department should say, quite firmly, to Ministers, "Okay you have the authority to make the decision that something has to be done in this area". Then they should be quite firm about the timetable and how the process is managed. There should not just be a press release and another initiative with Ministers taking the credit for making what they believe is the right decision. The department has to feel more confident about saying, "We will do this for you but we are going to do it the right way, and not in a way that will land you in trouble later on". The intention was wholly right and supportable. However, by grabbing at it in a way that I suspect was driven by a political timetable, things went seriously wrong. I want to add to the list of questions. What worries me most in the long term is that the department is now introducing two-year temporary time limits on substantial benefits by statutory instrument, without consultation. That is a disturbing precedent—there is no other adjective—and I want an assurance from the Minister that wholly exceptional circumstances led to that. Again, I suspect that it was driven by Mr Purnell for whom I must say I have a great deal of time, even though I have just criticised him. The two-year temporary provision was not necessary. As far as I have read the papers there was some £5 million a year, I think, at stake in terms of the temporary nature of the provision. The Minister might clarify that as I could not make sense of what it would cost to have run it on beyond two years. The combination of the temporary provision and the lack of consultation is worrying. We all know that the benefits system is ineffably complicated but the defect at the heart of these regulations is the fact that somebody could artificially come out of a claim, make a new one and take advantage of the higher benefit levels. That is not an intrinsically complicated part of the benefits system but the kind of thing discussed in the corner of the bar of the Dog and Duck every Friday night. You need not be a highly paid departmental lawyer to work out that maybe people will take advantage of that, and it should have been entirely foreseeable. I do not accept that this is some complicated bit of legal text whose consequences people did not understand. Anybody who had given two seconds’ thought to bringing in the regulations in this way could see that artificially breaking the claim to come back in and get more money was a foreseeable risk. That was pretty shocking—I expect the department to be better than that. To describe it, as the Parliamentary Under-Secretary of State did to the Merits Committee, as an immensely complicated exercise which led to the mistake, is just wrong. There was an inadequate response to the Merits Committee report, which I read carefully. The chairman in a very gracious way made it quite clear that the committee was absolutely fed up at how it had been treated by the department. The noble Lord, Lord Freud, was right about that. I noticed that the Parliamentary Under-Secretary of State rather fingered the Permanent Secretary by referring to him at least three times and saying that he was instituting training. Latterly, the Merits Committee found out that the people who made the mistake had gone through the training anyway, which is an interesting vignette in itself. The Permanent Secretary must get a grip on this. If anyone is called in future by the Merits Committee to explain similar circumstances I hope that they will ask for Mr Leigh Lewis to appear in person and explain himself. He is an experienced and good Permanent Secretary but he must carry the can for this. The Merits Committee was right to exhibit displeasure and I hope that it will continue to do so. By the way, I hope that the training is now in place for everybody in future who gets anywhere near this kind of stuff. Another point is evaluation. Having read these papers carefully, I do not think that there is any chance of evaluating the effectiveness of this policy at all because there are no baselines of any kind. It is not a huge spend—I accept that, particularly since it is time-limited—but it is impossible to evaluate the effectiveness of this increased amount of public money as there is nothing against which to measure it. That is regrettable. I do not want to read too much into this but there was an exchange in the Merits Committee between Mr Howarth, who is the lawyer, at page 31, when he was asked by the noble and learned Lord, Lord Scott, about extra-statutory payments. He seemed to suggest—and I am really looking for an assurance that this is not the case—that extra- statutory payments were okay as long as they were within the Treasury budget limit for the programme cost. I do not think that the House can accept that. Extra-statutory payments—gratuitous payments—by the department are wholly exceptional. For the department to say, "Never mind, we can pay money gratuitously to people because it doesn’t bust the amount of money the Treasury has given us to do this", is completely unacceptable. I may be reading too much into the sentence at the bottom of page 31 in the Merits Committee’s fifth report but I would not mind a reassurance that we are going nowhere near that kind of territory. If we are, the House will want to know more about that, and rightly so. The SSAC and the Merits Committee have both done an excellent job. To come back to an important point made by the noble Lord, Lord Freud, I am a DWP watcher and had an immense amount of difficulty from home in tracking down the SSAC document, as it did not have a number. I do not think that that is the fault of the SSAC, but is something to do with the fact that HMSO or TSO are tardy when it comes to putting reference numbers on documents. The document that I eventually found had no number on it anywhere. If people are doing their best they can to keep up with some of these technical arguments, a good way of confusing them is not to give references or links to documents that people can understand. These were complicated circumstances concerning an amended set of regulations that we were amending. It was not easy even for somebody like me, who has been following these things for quite some time. The SSAC also put its finger on an important point. There should be a fundamental review of homeowners’ costs in future. Anybody who thinks that homeowners will be trading themselves out of repossession territory within the next two years misunderstands the dilemmas, financial and economic difficulties that the country will face in the next comprehensive spending review period. Two years will just not do it. Therefore, we should be looking at how we spend money to support these people in future. I cannot understand why we did not just flush the extra Treasury money through the existing system. Of course, that would have meant people waiting for longish periods, and there are benefits of the new system. I absolutely understand that. But if people—particularly debtors or people threatened with repossession—knew that there was this amount of money flushed through the old rules, it would have given them a lot more comfort and the same effect would have been achieved without all this complexity. This has not done credit to anyone. We seem to have snatched defeat from the jaws of victory, with a good policy going horribly wrong because of how it is administered. I finish where I started. I think that this was the right thing to do, but I hope that we will learn lessons. The noble Lord, Lord Freud, is absolutely right and has done a service to the House by bringing the regulations to our attention so that we can examine them and try to learn lessons so that such things do not go wrong in future.