Housing Benefit

Monday 6th December 2010 Lords Chamber

Question

14:35

Tabled By

[Baroness Morgan of Drefelin]

To ask Her Majesty’s Government what assessment they have made of the impact of their proposed housing benefit changes on the number of homeless children.

[Lord Knight of Weymouth]

My Lords, on behalf of my noble friend Lady Morgan of Drefelin, and at her request, I beg leave to ask the Question standing in her name on the Order Paper.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

My Lords, we have carried out an impact assessment on the changes to housing benefit. This was published on 30 November 2010. It does not contain an estimate of the impact on homelessness as we cannot anticipate the behaviour of tenants or their landlords. To reduce the risk of households becoming homeless we have a substantial package of financial and practical support in place, and we are giving households up to nine months’ transitional protection so that they can look for alternative accommodation if they need to.

[Lord Knight of Weymouth]

My Lords, the Government’s impact assessment that the Minister referred to estimates that 450,000 children will be affected by these benefit changes. Shelter estimates that 129,000 children will be forced to move home and that 54,000 live in families whose income, after housing costs, will now be pushed below £100 a week. Given that the Government say that they intend to take forward further analysis of the child poverty effect, should they not suspend these controversial orders until that important work is complete?

[Lord Freud]

My Lords, there are some extraordinary claims being made around these measures. There are some heroic assumptions in the Shelter figures. For instance, they are based on an average shortfall of £18 a week, which is well above what the shortfall will be. I should point out that 40 per cent of people in the private rental sector move every year and 70 per cent move within three years.

[Lord Rix]

What advice can the Minister offer people with a learning disability, who might find that they can no longer pay rents, which are increasing all the time, particularly in the London area? Does he think it appropriate that the Government should inflict trauma on people less able to cope with that trauma, some of them very vulnerable indeed?

[Lord Freud]

My Lords, the Government are fully aware that some people will have to make adjustments in their living arrangements. That is why we have put a large amount of resource into helping that transition process. The current figure, which we announced last week, has been increased by another £50 million to a total of £190 million over the SR 2010 period.

[Lord German]

My Lords, the Government have told us how many people will be affected in the private rental sector by the changes that they have laid. On the other side the argument now seems to be that, if you take out issues around London, no one will see their rent reduced and they will therefore be turfed out on their ear. Meanwhile, the Government believe that the private sector will reduce its rents. Why is the Minister so convinced that the private sector will reduce its rents?

[Lord Freud]

My Lords, I thank my noble friend for that question, which gets to the heart of the issue. There are three reasons why we think there will be an adjustment in the marketplace. First, we as taxpayers represent 40 per cent of the private rental market. Secondly, there have been some surveys of landlord attitudes; roughly half say that they are prepared to reduce rates. Obviously, they are sending a message back to the main buyer. Thirdly, last week we put in place a mechanism to help that adjustment process. We are prepared to pay direct rents to landlords where they are prepared to show flexibility in helping people to stay in their homes.

[Baroness Sherlock]

Will the Minister comment on the concern expressed by charities that families may be forced to move repeatedly? In particular, can he comment on the fact that all the evidence shows that families at risk who move repeatedly can be put out of the reach of the social services? What steps will the Government take to protect vulnerable families in that situation?

[Lord Freud]

My Lords, one of the points that was raised by SSAC, the advisory committee, was that by having two sets of changes in April and October we were potentially making people make two sets of adjustments. That is why we fine-tuned our arrangements, as we announced last week, so that they come into effect in April, but there is a nine-month period for people to make an adjustment. We have also put in £50 million to help local authorities deal with the transition—some of which will be difficult—to make sure that it goes as smoothly as possible.

[Baroness Gardner of Parkes]

As it is very important that families are kept together, can the Minister assure us that in the instances where families have to move—we all appreciate that we do not know how many yet or how that will be—every effort will be made to retain families as a complete unit rather than split the children away?

[Lord Freud]

My Lords, in response to my noble friend on that very important question, clearly we have every intention that families should be kept together. That is why we are putting so much money into managing the transition—£190 million—to make sure that it goes as smoothly as possible.

[The Lord Bishop of Lichfield]

My Lords, is the Minister aware of this morning’s report form the Joseph Rowntree Foundation that highlights the significant number of children in poverty who live in households where the parents are in work? Will the impact of housing benefit changes affect working and non-working households alike—with families becoming homeless and, as the most reverend Primate the Archbishop of Canterbury suggested, being forced to move away from employment however badly paid they are?

[Lord Freud]

My Lords, the right reverend Prelate makes an incredibly important point. As the Joseph Rowntree Foundation reported today, the latest figures show 2.1 million children in poverty from working families and only 1.6 million from out of work families. The whole purpose of our reform of the benefit system is to get rid of that problem—to make sure that there is a smooth transition between out-of-work and in-work, that work always pays, and that it has the effect of bringing people out of poverty.