(12 years, 6 months ago)
Grand CommitteeRead Hansard Text Read Debate Ministerial Extracts
Lord McKenzie of Luton
“( ) Such an amount shall remain in payment in the event of the claimant lodging an appeal regarding any aspect of universal credit.”
Lord McKenzie of Luton
My Lords, I shall endeavour to speak up, George. I am not sure whether it is this camera that you want me to speak to.
This is by way of a probing amendment. It was prompted by an article in the Times of 14 October. The article suggested that people were to be denied their benefits if they appealed against the determination. That seemed to be in the context of the reassessment of incapacity benefit claimants, particularly those who were denied ESA— the work-related activity group— who could therefore qualify for jobseeker’s allowance. The article stated:
“Hundreds of thousands of welfare claimants face losing their benefits for months if they challenge a ruling that they are fit to work. Ministers are looking at removing payments during the appeals process in an attempt to slash the number of challenges that are threatening to derail the Government’s benefits reforms. The unprecedented move is being considered as one way to unclog the courts which are set to be inundated with appeals as the Government attempts to reduce the annual £7 billion incapacity benefit bill. A reassessment of all 1.6 million incapacity benefit claimants began in April, with ministers promising to move them on to a new system with narrower eligibility criteria for the sick and stricter requirements to find work. However, concerns over both the reliability of the test to find out whether people are ready for work and the scale of the project has prompted fears of a mountain of appeals. Judges have said privately that they could be facing 500,000 cases a year, some taking more than nine months to resolve”.
In view of the concerns that an article like that can generate, we consider it appropriate to give the Minister an early opportunity to set the record straight, and hopefully deny that that is the Government’s intent. To be clear, do the Government have any plans or otherwise contemplate, by amendment to this Bill or otherwise through regulation, the prospect of denying individuals their benefit should they appeal against a determination that denies them incapacity benefits or employment and support allowance?
At present, where there is an appeal against a decision not to include somebody in the work-related activity group, that causes benefit to be paid at the assessment period rate only, which is the JSA rate. Is this the type of arrangement which the Government are seeking to replicate, or are they proposing to go further and to deny benefit altogether? This raises wider issues which we shall come on to in subsequent clauses, but what conditionality would apply during the period when the appeal is outstanding? I hope that the Minister can set the record straight and clear on this. If he proposes to confirm that the article has some validity, we have some additional questions which we would pose to him. I will give him the opportunity to set the record straight and deny that this article identifies something which the Government propose to take forward. I beg to move.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)
My Lords, the amendment is slightly different from the question posed, and I shall deal with the question posed. The changes to the current appeal system are being taken forward in this Bill, as expressed in Clauses 99 and 100, so we will have an opportunity to discuss those in that consideration. We are, in those clauses, looking to introduce a period of reconsideration, or a reconsideration process, prior to a full appeal. We can have further discussion at that point, but regardless of what an article in a newspaper might say, clearly the practical difference, if one was to be extended in the way described, is purely a difference of conditionality, because as the noble Lord, Lord McKenzie, pointed out, the actual payment rate of the assessment phase of ESA is the same as JSA. That article has put out a lot of misinformation.
Lord McKenzie of Luton
My Lords, I am grateful to the Minister if he is saying that what is being contemplated in effect replicates what currently exists. When an appeal is outstanding, the assessment period rate, which I think is the JSA rate, applies. If that is what is going to be replicated in the new world, I understand that and can see that the article was misleading on that basis. Broader questions are raised, however, given that there is going to be a universal credit, components of which would in due course be held back during an appeal. If we are talking just about the work-related activity equivalent components, I can understand parity with the existing situation, but obviously other components will go into that, including housing issues. However, I am happy to leave that debate for when we reach Clauses 99 and 100, supposing that we do reach them at some stage in our deliberations. I think the Minister has dealt fairly with the principal concern that the article generated, and I beg leave to withdraw.
Baroness Hollis of Heigham
My Lords, Amendment 34A, as noble Lords will understand, is a paving amendment for the subsequent, substantive amendment, Amendment 48, so that we can have a broader discussion on housing stock before we get into talking about individual client groups. That seemed to be a sensible way of proceeding. I declare an interest as a former chair of a local authority housing committee and a current chair of the Broadland Housing Association.
For me, underoccupancy is the most important issue in the housing section of the Bill. Essentially, the Government are saying that any tenant who is not a pensioner and is underoccupying will have their benefit cut to the size of the property that they should be occupying. The English house condition survey, and the DCLG in the past, regards someone as underoccupying if they have more than one spare bedroom. Indeed, the latest Written Answer from Grant Shapps states:
“It is estimated that 423,000 households were under-occupying”,
which obviously includes pensioners.
“This estimate is a three-year average … Under-occupying households are those with at least two bedrooms more than they need according to the Bedroom Standard”.—[Official Report, Commons, 11/10/2011; col. 337W.]
The DWP, for benefit purposes, will not allow two bedrooms more or one bedroom more but requires a precise fit. This is a much tighter and even claustrophobic ruling. A later amendment, Amendment 44, which I favour, would align the DWP to the DCLG standard. As almost 80 per cent of tenants who are affected by the DWP’s proposals have only one spare bedroom, that would address the issue for most people, although of course with implications for projected savings.
This amendment, like Amendment 43, tackles the issue in a different way. It requires the social landlord, not the tenant, to take responsibility. If the landlord does not have the stock to offer, the tenant should enjoy his current home with full HB. If the landlord can offer appropriately sized stock by DWP standards, the tenant takes the HB hit if they choose not to move.
Why do I think the DWP standards of underoccupancy are too tight? Under DWP plans, a couple with two teenage daughters in a three-bedroom house will be underoccupying, and will receive benefit only for a two-bedroom flat or home. Let us remember that we are dealing with social housing that is now built well below Parker Morris space standards. Two teenage girls might be expected to share a second bedroom that is 10 feet by 8 feet. Let us visualise two single beds put against the 8-foot wall, with 2 feet between them. Fifteen year-olds are not going to sleep in bunk beds as though they are five years-old. A 3-foot wardrobe and a 3-foot wide chest of drawers are in the 3-foot by 6-foot space at the bottom of the beds. There may be a gap of 1 foot, and that is it, if you are to open the bedroom door. There is no space for a desk, a table, or a chair. Where exactly do they do their homework? Not in the galley kitchen, because they will not have one, and not in the only living room, where the parents want to eat, talk, watch TV. They cannot do their homework anywhere, so maybe they will not. City children can stay on at school of an evening or use the public library for their homework in that situation. Rural children, dependent on the school bus, can do neither. And then we are surprised at the GCSE results. As a result they cannot find a job, and I fear that there could be two generations of worklessness.
This example assumes that those four family members have moved to the two-bedroom flat as required under the new proposed changes in housing benefit. Actually, probably they will not. Most two-bedroom homes are actually three-person, not four, with a small second bedroom, and although some 12 per cent of my housing association’s three-bedroom houses are four-person houses with a double bedroom and two singles, most are five, so we have three-person accommodation, and five-person accommodation. Imposing HB caps by bedroom numbers rather than by total space size of bedrooms—that is, trying to shoehorn a four-person family into a two-bedroom, but three-person, property—will certainly take us into the realm of forced overcrowding and judicial review. Such a family will be deemed by the DWP to be underoccupying a three-bedroom five-person property, and deemed by housing law to be overcrowded in the only property they can move to, which is a two-bedroom three-person home. What would the Minister have us do?
Will the Minister say whether, if that family were in a three-bedroom but four-person house, they will receive full HB as three bedrooms or persons, or whether they would be expected to move to a two-bedroom flat even if they were three persons? If we put a family of three into a two-bedroom four-person house, would that be classified as underoccupied? I am not playing word games because, depending upon the outcome of this question, families will or will not lose more than £10 a week of their housing benefit. These are the allocation decisions that my housing association and local authority are making day in and day out.
A fortnight ago I was visiting an attractive small development of some 20 homes that we have just built. Thirteen of them were two-bedroom houses, four of them were three-bedroom and there were three bungalows. However, of those 13 two-bedroom houses, 12 were three-person. Only one was four-person. We do not have and we are not building the four-person stock that the Minister has now told us that tenants in a family of four should occupy to get their full HB. They are mostly either three-person or five-person, with the assumption that the couple get the first type and the couple with children get the other. Nationally, our situation is replicated. There is a huge shortfall of one-bedroom and two-bedroom accommodation. Relatively, there is a surplus of three-bedroom accommodation. The national federation calculated that last year 180,000 families were waiting for two-bedroom homes, and just 60,000 became available. Who do those families go to?
I can tell noble Lords about our allocation structure. First, the homes go to families in urgent housing need. Next we have pensioners—to whom the changes do not apply—in three-bedroom homes queuing up to move to more convenient and easier-to-heat two-bedroom homes. Yet we cannot always help them because we do not have the stock, and they are the people who are most likely to underoccupy. Then we have families who need to transfer from one two-bedroom property to another in order to help look after frail elderly people in a nearby village. So we have queues of people wanting two-bedroom accommodation who are willing and able to move, and we cannot meet that demand.
However, under the Bill, if there is no two-bedroom accommodation for my four-person family to move to—as there is not—they are fined with cuts of £15 a week or more. It is madness as well as a misery. We allow—indeed, we make—the pensioners who would like to downsize stay put, while requiring the family who wants to stay put to move. This possibly causes a dislocation of schools for their children and of family support. Yet the HB bill would be identical if we swapped those categories around.
To its credit, the impact analysis recognises this and agrees that there are insufficient two-bedroom properties to meet these forced moves. On page 2, it is stated:
“If all existing social sector tenants wished to move to accommodation of an appropriate size, there would be a mismatch between available accommodation and the needs of tenants”.
Quite so. Some 670,000 tenants would be affected—2,000 of them disabled—or 32 per cent of all HB claimants. Some 108,000 tenants live in an adapted property, with the average cost of adaption being £6,500; yet 78 per cent of them are underoccupying by only one bedroom, which the DCLG does not consider as underoccupying but which the DWP is proposing to consider for benefit purposes. That could be an extra small bedroom for each teenage daughter to do their homework in, for a husband or wife who is in poor health and has disturbed sleep, for the occasional overnight carer of a disabled person, or for a grandchild.
Let us return to my family of four who are obliged to move or face HB cuts. As there is a shortage of smaller accommodation, what then? How can the tenant move if there is nowhere to move to? “Oh”, states the impact analysis blithely on page 8, at paragraph 24:
“In these circumstances individuals may have to look further afield for appropriately sized accommodation or move to the private sector, otherwise they shall need to meet the shortfall through other means such as employment, using savings or by taking in a lodger”.
Employment? Do noble Lords really think that they have not so far looked for work and that a £15 fine on their HB bill will find them a job? Using savings? The average individual savings of £300 would cover the shortfall for barely five months. Taking in a lodger? If you have small children? We need to get real. Instead, if they cannot afford the HB cut, they may move, apparently, to the private rented sector, where their HB bill will of course increase because it is higher. That, of course, is if they can find a landlord to take them, given their past history of possible rent arrears, and if they can find the deposit—a month’s rent in advance—together with moving costs, curtains and carpets, which may come to £1,500 out of savings of £300. In rural Norfolk, all this takes place close to the school that the children go to. It is simply not possible. If the family moves after falling into arrears, which private landlord will accept them anyway?
The impact analysis is revealing—it sort of knows all this. It expects savings of £700 million, but this is based on the presumption that families do not move but stay put, are fined and have their HB cut. I quote page 2:
“If a significant number of tenants wished to move, this would reduce direct savings and place extra demands on social landlords”.
A couple with a child in Crawley, quoted by Shelter and Crisis, moving from three-bed social housing to a two-bed private rented flat would see their HB bill rise by £66 a week. The savings—and this is key—are based not on people moving to smaller accommodation but on their being fined for not moving because the stock is not there and for staying put. In other words, the Government are basing their savings not on people doing what the Government say they should do but on their not doing it. The Government need their public policy, for people to move home, to fail if they are to ensure that their private policy—to cut HB and make the savings off the fines for people not moving as normally required—succeeds.
I was pretty horrified when I read that. You might think that issues around underoccupation were at the very least being propelled by a huge increase in overcrowding, so that, however reluctantly, underoccupying families should move to make way for those in greater need. It is not so. On average, 5 to 6 per cent of all households in all rented sectors are overcrowded; 40 to 50 per cent are fit; 40 to 50 per cent are underoccupied, many of them containing pensioners. So the needs of the overcrowded could be met if we were able to meet the requests of pensioners and others to downsize. No force majeure is required, except that we do not have the stock to do it.
This is not about the need of other families for the house that you are underoccupying; it is about artificially capping the HB bill knowing that there is insufficient stock for tenants to move into and then pocketing the fines because they have no alternative course of action. That is not a proper way to behave. They stay put because they cannot move and arrears mount because they have run out of savings. What do the Government suggest local authorities and housing associations then do? Should they evict them? As I said, how many private landlords will take on a tenant with rent arrears? No judicial review, and there will be plenty of those, would regard them as intentionally homeless—in which circumstances the local authority would give them priority housing and back they would come again into social housing, where everybody can find a home, or go into B&B at five times the cost. But if they are not evicted, arrears mount rapidly and a housing association’s balance sheet goes into the red. It may already have tripled the amount set aside for rent arrears due to direct payments to tenants. It could now expect it to double again if it does not evict.
We have four solutions. First, we can follow Amendment 44, aligning the DWP’s definition of overcrowding with that of the DCLG and largely define the problem away. This is the solution that I prefer, but I accept that it has cost implications. Secondly, we can build and better balance the stock, but that will take years, as our building programme is being halved by DCLG. We can, thirdly, ask local authorities to use their discretionary housing payments to top up, except that my local authority ran out of money halfway through the financial year—last November, in fact—and even then had helped only a few families. The £60 million, although welcome, will go nowhere near to meeting or softening cuts of £2 billion-plus. The final option is the path of these amendments. We place the responsibility on the landlord and not the tenant. They do not say no change; they are genuinely a compromise. If the social landlord can make an offer of appropriate accommodation, the tenant will be expected to take it or take on the HB shortfall and government make their savings. But if the landlord cannot do so because the homes are simply not there, as in my housing association, then HB continues exactly as was.
We sanction people in JSA if they do not seek work, because they can and should. We use the threat of sanction to change their behaviour. What we do not do is sanction them if, after a proper job search, they cannot find a job, because no change in their behaviour can change the economy and job vacancy rates. We sanction them according to what we can reasonably expect them to do and how they change their behaviour. This is about job searching, not a lack of job success.
Similarly, it may be reasonable to sanction by HB cuts someone who is grossly underoccupying a house that a much larger family desperately needs and who could change their behaviour by downsizing. We could debate that, but to sanction families for not moving when they cannot change their behaviour and cannot move because of the housing stock is not a sanction but a punishment of people who not only have committed no offence but who can do nothing to avoid the sanction by changing their behaviour. That is wrong. We should not fine some of the poorest people in the country who have been set up to fail. It is not their fault, and it is not decent, and I really hope that the Minister, who I am sure will share these worries, can indicate that he accepts the principle of the compromise of this or some subsequent amendment. We would all be happy to discuss further with him how this might be done. I beg to move.
Lord McAvoy
My Lords, I want to put a couple of points to the Minister on a particular aspect of the availability of suitable accommodation. I will describe the city of Glasgow because it is the biggest city I know. I stay adjacent to it and I know quite a bit about the different types of housing there. Some is council accommodation. My noble friend Lady Hollis of Heigham has indicated that size is important and that people can be in a small room that is classed as a room. Glasgow has what are called three-stairs-up tenements, which are usually in red or grey sandstone tenement blocks. The rooms are smaller in the likes of Dennistoun, Townhead and some older parts of the city centre, but massive in the likes of Shawlands, King’s Park and Langside. If someone was “forced” to move from a small two-bedroom flat in Dennistoun to King’s Park or Shawlands, they would be dancing up the stairs, because it would be a vast improvement on the living space that they had had. They would soon get a sofa bed in the living room.
I am leading up to the fact that this is a very difficult situation and I really do not know how this can be done. Has any assessment been made to address the main thrust of my noble friend’s amendment, which deals with the fact that the size of rooms is just as important as the number of rooms? As I say, it would baffle me, but there are highly paid people working for the Government who should at least be able to test this. My question is therefore: has some consideration been given to assessing the size of rooms compared with the number of rooms in individual cases?
Baroness Turner of Camden
My Lords, I support the amendment, which was so comprehensively moved by my noble friend Lady Hollis. One of the concerns of the organisations that have written about the Government’s proposals relates to the plan to reduce housing benefit for working-age tenants who are allegedly underoccupying social homes. From 2013, some 670,000 social housing tenants receiving housing benefit could lose an average of £676 a year, because under the new rules their homes could be deemed too large for their needs. The cuts could force them to choose between moving away, and thus leaving any local support networks or supportive neighbours, or going into debt. This could be particularly difficult for disabled claimants, many of whom could have had their homes adapted to deal with their disability. A spare bedroom may be necessary should family members visit or if the aid of a carer is required. There may well be no similar accommodation available in the locality. Some of the amendments before the Committee attempt to deal with these problems.
Baroness Thomas of Winchester
At this point I should like to make a point on the second new subsection proposed by Amendment 48, tabled by the noble Baroness, Lady Hollis. Many disabled people will have had their homes adapted with help from the mandatory disabled facilities grant, which local authorities have to pay to eligible people. This may be as much as £30,000, depending on their circumstances, and is means-tested. Do the Government really expect families or couples who include a disabled person, or even a single disabled person, to move from an adapted property if they are considered to be overoccupying, with all the upheaval that that will mean? Such disabled people may not even be receiving DLA. A couple including a disabled person may have a two-bedroom house or flat which they need to house equipment. This equipment may include bulky and heavy items, such as oxygen tanks, mobility aids, hoists and so on. It might be a vital room for the disabled person or their partner or carer to be able to use in exceptional circumstances, as the noble Baronesses, Lady Hollis and Lady Turner, have both said. If there is no flexibility, will there have to be another pot of money to enable a couple to adapt a new, smaller home? I cannot believe that this is a sensible use of public money.
Baroness Lister of Burtersett
My Lords, my noble friend Lady Hollis has made a devastating case. I simply want to read out an e-mail that I received from someone who stands to be affected. She says:
“We have two children. Both girls are currently living in a two bedroom flat. We have been assessed by Social Services and GP as needing a three bedroom property due to our eldest daughter’s medical and welfare needs. She suffers from frequent, severe UTI infections which can leave her very poorly and in a lot of pain. She also suffers frequently from incontinence. This is having a very serious effect on her emotional well being and indeed is having a knock on effect on the whole family as we have to go in several times a night to see to our daughter to change her bedding, give her pain relief, clean nightwear, etc”.
This family had been told that they could move to a three-bedroom flat but have now been told that they cannot because of the incipient welfare reform legislation. The e-mail goes on to say:
“The new welfare legislation means that we are no longer entitled to a three bedroom even though they have written proof that we need one. This is now putting serious strain on my family and is affecting my eldest’s welfare. I cannot fight the law, I wish I was able to. I just want people to be made aware that families like mine suffer needlessly when these legislations are made. I would love nothing more than to be told my eldest can have her own room as I know her welfare would improve dramatically. But this is not going to happen”.
When I read this I thought that it surely could not be the case. However, presumably a family in this situation will not be allowed the bedroom that they need for their welfare. I feel dreadful reading such an e-mail and I hope that the Minister feels dreadful hearing it.
Lord Wigley
My Lords, the case made in the excellent opening speech by the noble Baroness, Lady Hollis, did not concentrate so much on the disability side, which we will come to in another bank of amendments, but was very strong indeed. Yes, the second part of Amendment 48 applies to disability, but her main thrust was on the adequacy of supply of houses.
The noble Baroness referred in particular to the situation in rural Norfolk. I can certainly vouch for the circumstances in the areas that I know in rural Wales, where this is an enormous problem because so much social and council housing in rural areas, particularly in beautiful rural areas, was bought under the right to buy legislation of the 1980s. Many of those properties that used to be social housing are now second homes. If anyone is expected to move in order to match the circumstances of the housing benefit permitted under this legislation, such people just will not find accommodation to meet those needs. It is suggested that they will find it in the private sector, but in rural areas, particularly where tourism is a major industry, the private housing sector is dominated by the rent that can be attained in the summer months from the tourism industry. Therefore, the likelihood of finding a suitable place is remote indeed.
My fear is that so many exceptions to the proposed legislation will arise that it will not be workable. We heard about the circumstances in Glasgow and the problems of disabled people who will be caught in this. With regard to the rural dimension, the one aspect that I would like to see is the building particularly of bungalows in the proximity of villages to provide the housing need, albeit that that would be a longer-term solution, as the noble Baroness, Lady Hollis, mentioned. One knows that the one category of house in overwhelming demand everywhere is the bungalow. A programme that bought land on the borders of villages that was currently outside the development boundaries and towns into those boundaries, and that was therefore possible to acquire at an intermediate price between the market price for building land and the much lower value of agricultural land, should help to provide a stimulus for the building industry and an answer, over a period of time, for some of the imbalances in the housing stock.
I realise that this does not come under the purview of the Minister, but perhaps the Government could, in the seamless web that they create, think about that possibility as a longer-term solution.
Lord Stoneham of Droxford
My Lords, I declare an interest as chair of First Wessex Housing Group and chair-designate of Housing 21. I also appreciate the speeches of the noble Baronesses, Lady Hollis and Lady Turner, but underoccupation is a problem when there are great shortages in housing. It is fair to accept that we need to address this problem, but it would be unfair if we do not get right the details for the transition of these proposals.
I agreed particularly with what the noble Baroness, Lady Turner, said, in that we have to accept that we are dealing with people’s homes. They may be social homes or council houses, but they are people’s homes. We are not dealing simply with a marketable commodity. Some 670,000 tenants of working age are affected by these proposals and, as the noble Baroness said, many of the people in these homes are disabled. There are two fundamental problems. One is that underoccupation does not necessarily coincide with where there is the greatest housing need. The other is that the availability of supply to correct the problem is limited. I had the figures that the noble Baroness, Lady Hollis, mentioned but in a different context; I thought that there were 180,000 social tenants underoccupying two-bedroom homes and that if we wanted to move them into one-bedroom homes, in the past year only 68,000 became available. That seems to be a critical figure.
We know that the other problem is that if we drive people out of social housing in the public sector, we may well add to public spending through the higher rents and the allowances that will have to be paid in the private sector. We want to hear from the Minister, in due course if not today, on the need to get the period of transition right to allow people to adapt and for the stock to adapt as well. We should concentrate on genuine occupation that can be corrected, and we should consider leaving out certain categories: disabled people, foster carers and those in supported housing. We should also concentrate on homes with more than two bedrooms that are underoccupied, and we should, as the noble Lord, Lord Wigley, said, look at a programme of bungalows and one-bedroom homes for older people who want to downsize. I have recently been involved in a scheme where people’s pride in their new homes is remarkable. We had to encourage them to move, but when they saw what was available they were very willing and proud to do so. However, if we concentrate now on the transition as the result of all these changes, we shall dry up the number of homes and the capacity to help people who genuinely want to move. Getting the transition right is therefore key to this change.
Baroness Wilkins
My Lords, as my noble friend Lord Wigley suggested, I will leave the arguments about disabled people until our debate on the next group of amendments, and talk first about people who are not able to move because of a lack of supply. The Riverside housing association says that for those who stay put, the loss of benefit,
“will have a very significant impact on household income at a time when tenants face huge pressures from rising fuel and food prices”.
Social landlords house,
“some of the poorest households in the country … Such losses would enforce difficult choices between subsistence items such as eating well, clothing the children and, of course, paying the rent”.
Riverside points out that two-thirds of its tenants have,
“a net household income … of less than £10,200 per annum”.
This will cause devastating hardship.
Lord German
My Lords, I support my noble friend Lord Stoneham in his case for transition. My argument is that if we are going to introduce a policy of this sort, we have to ensure that the social and public housing sector is capable of meeting the changes that are being demanded by the policies of this Bill. Three policy ambitions underpin these clauses. The first relates to the inefficiencies in our social housing sector at the moment and the need to make better and more efficient use of our housing stock, bearing in mind that 7 per cent of homes in the social housing sector are overcrowded and 11 per cent are underoccupied. Already, there is a big mismatch. The second is that we want to increase mobility and strengthen the incentives to ensure that people can move within social housing in order to transfer into work. The third is the ambition to reduce the cost pressures on an ever increasing housing budget. We should remember that in today’s terms the budget has, over the past decade, increased from £14 billion to £22 billion a year, at the equivalent rate today.
My question for the Minister is: how prepared is the social housing sector to meet these changes in policy? If we follow the logic through, we see that there are only three choices that a tenant can make. The first is to pay the increased rent, which we know will on average be £13 a week for a one-bedroom overoccupier. The second is to occupy the spare room, which means either taking in a lodger or having the children back. I guess that some people would not mind having their children back but that others would not want them back at any cost. Whatever the circumstances, is that a realistic choice for many people?
The third choice that people will have is that they can move. In those three choices, what modelling has been done on how many people will make choice one, two or three? The only modelling I have seen has been from the National Housing Federation survey, which is only for part of the country, and they surveyed only 452 people. Clearly, if you are going to have a policy of this sort, the Government must be able to say that they have sought these solutions to ensure that their policy will work.
Lord Foulkes of Cumnock
Can I ask the noble Lord a number of questions since he is asking the Minister a lot of questions? He seems to accept the policy in the Bill but only wants it postponed, so what is his attitude to the amendment proposed by the noble Baroness, Lady Hollis? What is his response, particularly to the point made by my noble friend Lady Turner that this should be done by agreement and not be forced on people?
Lord German
I think if the noble Lord would wait a few moments, he will see what I am proposing. It is on this piece of card, which I can pass to him, but if he just bears with me, I will give him three things which I think are essential in order to make this section of the Bill work. That is why I am posing the questions, because it seems to me that the solutions are not given in any of the documents.
The document from the DWP about what these choices will be and the three questions that people will have to answer says:
“it is unclear how this”—
the policy—
“will affect the choices of claimants that are likely to be affected by the measure”.
In other words, the Government do not know; or do they? If they do know, we need to ensure that we have those figures in front of us. If we are to avoid unintended consequences, we are going to have to look at the levers that ensure that the housing stock is accurate, and if the housing stock can, over time, match the needs of this particular policy.
As we know, there are 670,000 claimants, presumably of working age, which means that a third of a million non-working age claimants are underoccupying—the noble Lords, Lord Stoneham and Lord Wigley, have talked about elderly people underoccupying. Maybe there is an answer to that which the Minister and the Government have already thought about. There are no figures that I have seen in any of the documentation that indicate how we are going to manage to create a housing stock to match the changes. First, we need to know how many of the 670,000 are going to move and the modelling figure behind it. Until we have the answer to that, we cannot answer the question about how many houses we are going to need.
Baroness Hollis of Heigham
The Government’s own impact assessment says:
“Estimates of Housing Benefit savings are based upon the current profile of tenants in the social rented sector, with little tenant mobility assumed”.
Lord German
I am grateful for that quotation, which of course goes against the other one that I gave from further on in the document, which says that we do not know what claimants’ choices are likely to be. The noble Baroness’s quotation has the word “little” in it. We have often reached the point where we have quoted from different sections of the same document, and that is why we need answers. We need to know which of the three choices people are going to make so that we can determine whether the homes are available for them. There are three solutions, which I put to the Minister and which we need answers about, at the very least after his answer to the fundamental question of whether we have the housing stock.
I ask the Minister, when replying, to talk not about the DCLG but about the three government departments that are responsible for these matters in this country, because three levers have to be pulled for the DWP to be able to answer that single question. What is the solution? I would like to know what the three government departments feel about how they can match housing demand. I must say that I am not particularly encouraged because, for many of us, moving house is probably the worst thing in the world that you could probably do. In fact, my noble friend Lord Kirkwood told me this morning that we ought to exchange our rubbish with our neighbour’s because our neighbour’s rubbish is much more interesting than our own. I have found moving house to be a very uncomfortable exercise, and I am sure we have to be careful of this. The Government say that they are working in England to develop a team of advisers who will work to help people to make better use of our housing stock, which is a laudable aim, but they also say that they will work with the devolved Administrations to see what can be done in Scotland and Wales. What can be done about the housing stock across the whole of the country where this policy impacts?
It seems to me that there are three potential solutions when we have the answers to the figures, one of which is that we must have housing money—discretionary housing money, or whatever—to ensure that the money reaches the particular groups that will need it in order to be able to make the adjustment. The second is about exceptions. We will come to that in the next set of amendments, but where the cost to the public purse can be demonstrated to be larger—and many of the amendments coming up now will demonstrate that—we must ensure that we have exceptions. The final point that has been made by many noble Lords here today is that we must have transition time for the social housing sector in all three parts of the country where this Bill applies to make the changes in order that this policy works. We cannot achieve the original purposes of these measures, all of which I think are right, without achieving those three things and without ensuring that we have a sector that can—
Lord Foulkes of Cumnock
I have listened very carefully, and the noble Lord’s Welsh eloquence—what do you call it, hwyl?—is impressive, but he has still not made it clear to me whether his speech is in support of the amendment by my noble friend Baroness Hollis.
Lord German
My speech, my Lords, is in favour of the policy proposals that are behind this measure, but in order to achieve that this amendment has given us an opportunity to explore the issues that need to be satisfied in order that we can proceed. And hwyl, by the way, is spelt H-W-Y-L, for the record.
Baroness Hollis of Heigham
Does that mean, therefore, that the noble Lord supports the DWP definition of underoccupancy in which there can be, except for special groups, no spare bedroom, as opposed to the DCLG one, which I outlined, which allowed at least one bedroom more—and in the latest Parliamentary Answer from Grant Shapps is two bedrooms more? Is that what the noble Lord was saying? We need to be clear where he is coming from on this.
Lord German
I cannot answer that question until such time as we have the answer to what our housing stock is, how many are going to move, and for those who are going to move whether there is available housing for them. That was the answer to the question, and the one I will give if the noble Baroness asks me again.
Baroness Hollis of Heigham
This is an “in principle” question: what definition of overcrowding or underoccupying is the noble Lord assuming such that the transitional arrangements must seek to meet and adapt to?
Lord German
I will repeat the answer that I gave the noble Baroness just now.
Lord Foulkes of Cumnock
I have still not had the answer to my question. I do not want him to repeat it, just to clarify it. It was the pronunciation of hwyl I had problems with, not the spelling.
For all his bluster and eloquence, I think the noble Lord has confirmed that he still supports the coalition Government’s dreadful proposals in the Bill. All his questions to the Minister are really just to cover up that fact.
Baroness Thomas of Winchester
The noble Lord, Lord Foulkes, is bullying my noble friend, which is outrageous. My noble friend is exploring the issues around this question, which is perfectly valid in Committee.
Lord German
If the noble Lord wants me to answer the question, I can answer it, and will answer it in this way; I believe that the three underpinning policies behind this section of this measure are correct, but in order to achieve those we have to answer some of the fundamental questions, which the noble Baroness, Lady Hollis of Heigham, raised earlier on today. I have also tried to seek answers to those questions, because I have not found them. That is what we are here to do, and that is what the Committee stage of a Bill is about, it seems to me, but I am new to this particular Parliament. In the one I have come from, that is what we would do: explore these issues.
Lord Kirkwood of Kirkhope
My Lords, I am provoked into joining this discussion, which I was going to leave until the next group of amendments.
First, underoccupation is one of the most serious concerns in this Bill, and I think that those concerns are shared across the Committee. I do not think that it helps to start picking away at the positions of individual members of the Committee at this time. What I think we are trying to do is to make it clear to the Government that the current proposals are unacceptable. They are unacceptable to me for two reasons. One is process—and we touched on the discussion about transition. On 1 April 2013, between 5 per cent and 10 per cent of the case load, which is arguably 67,000 working-age families, will be tipped into debt. It is a brick wall that they cannot avoid. It is very unusual for a social policy change of this magnitude not to have built in a transitional provision.
With a little bit of application and consideration, we might be able to address the issue of overoccupation, which it would be sensible to do in the long term. Speaking for myself, I think that Amendment 44 is close to doing that, although Amendment 40 is not far away. I got a very interesting note from Moat housing the other day, which suggested that:
“Two bedroom properties or below should never be regarded as ‘under-occupied’”.
It is as simple as that. That is another way of expressing it. I do not know what it would cost, but the Committee is right to explore some of these circumstances, which have ramifications for social landlords as well as everyone else. What worries me more than anything else is that on 1 April—that may be an appropriate date—in 2013, that change will be made, and people have very little protection or room for manoeuvre.
The other very interesting suggestion that Moat housing made to me, which I had never heard before, was that a “soft start” could be adopted when people were demonstrating that they were taking steps to address the underoccupation that they were allegedly facing at the time. They could continue to get the full support until they had made the appropriate arrangements. It would probably take 18 months or two years to work out in the wash; that may be too tight a period—it might take longer than that to do safely. As a Committee, we are looking for a safe transition process and a way of limiting the brick wall of debt that 670,000 of our social tenants in the United Kingdom will face on 1 April 2013. That is a matter of concern across the Committee, which I think we should represent to the Government in a way that will occasion constructive change on Report.
Baroness Sherlock
My Lords, there is very little left to say, particularly after the astonishingly impressive opening speech of my noble friend Lady Hollis. If I were a Minister facing that speech across the Table I would have run the white flag up and gone to the pub, but the Minister is clearly made of sterner stuff than me, which is probably just as well.
I have two questions, the first specific and the second general. First, what discussions has the Minister had with colleagues in other departments about the position of children in relation to the implementation of these provisions? Like many other noble Lords, I have had a number of cases raised with me on the position of disabled children, to which we may return, and children with health problems, as discussed by my noble friend Lady Lister. Also, Barnardo’s, for example, raised with me the position of families in which a child or children are in temporary care. For example, they may live temporarily under a residence order with their grandparent, and while the family is trying to get the children back it may look as though they are underoccupying when they are not. There is a whole series of exceptions. I am interested in the specifics, but more generally has the Minister talked to colleagues in other departments about the impact on child welfare, safeguarding and well-being or child poverty when this policy is implemented?
The second question is one the answer to which I would be very interested to hear. We have talked a lot about modelling and transition, but the noble Baroness, Lady Hollis, talked about what seemed to me to be an astonishingly simple amendment. She said that somebody should not be required to do something that they are incapable of doing. What is the Minister’s philosophical reply to that?
Baroness Hayter of Kentish Town
My Lords, I start by saying that it was good to hear a defence of the noble Lord, Lord German, who arrived in the House at the same time as I did. However, I thought that being asked questions and dealing with them was a wonderful preparation for being Minister, and I hope that the government Whip has taken note of that.
It is difficult to add to the words of the noble Baroness, Lady Hollis, who, as the Guardian said last week—and only the Guardian could use these words—gave a “frankly beautiful speech”, and an astonishing one today, as it was described by my noble friend Lady Sherlock. I hope only to add a few remarks in support of what she said. First, I remind us, as did my noble friend Lady Turner, of the special nature of a home. We know the importance of feeling secure in one’s home and that one of the biggest causes of stress is a house move. It affects all of us, whether we are owner-occupiers or renters, old or young, rich or poor. As the noble Lord, Lord German, said, it is one of the worst things that we have to do.
Lord Freud
My Lords, the size criteria measure marks a significant change in our approach to housing benefit for claimants living in the social rented sector. The current housing benefit system is not fair; it is not right that families on benefit in the private rented sector have been able to live in homes that most working families could not afford, and we have already begun to tackle that unfairness through changes to the local housing allowance. It is also not fair that, in the social rented sector, housing benefit pays out the full rent on properties that are larger than required by those who live in them, while at the same time over 250,000 households in England are overcrowded.
To pick up one of the many points made by the noble Baroness, Lady Hollis, on the bedroom standard, that standard actually expects children aged over 16 to share a room with children of the same gender until they are 21. That is a rather tougher requirement than that of the DWP and the LHA, which allows separate bedrooms for a child of the same gender, aged 16 and over.
Baroness Hollis of Heigham
My Lords, that was why I specified a 15 year-old in my illustration of bedroom size.
Lord Freud
I shall continue. By 2014-15, the annual savings achieved as a result of housing benefit reform as a whole will exceed £2 billion. It is right that the social rented sector plays its part in achieving those savings. The size criteria measure itself will achieve around £0.5 billion of savings each year from 2013-14.
On the point made by the noble Lord, Lord McAvoy, about room size—the example that he used was his nearby city of Glasgow and its tenements—the size of rooms is something that we are looking at with stakeholders as part of the implementation planning. That concern is shared by the noble Baroness, Lady Hollis. It is an issue that we are looking at.
Lord Foulkes of Cumnock
Could the Minister describe what he means by a bedroom?
Lord Freud
My Lords, I am tempted to ask the noble Baroness, Lady Thomas, to come and save me from bullying by the noble Lord, Lord Foulkes.
Lord Foulkes of Cumnock
I will make it easier for the Minister then, since he is finding it difficult. In my city of Edinburgh, there are a lot of houses with rooms that do not have external windows—they are box rooms. Some occasionally have a small skylight. Is that within the definition of a bedroom? Another example might be studio flats, or studio flats that may then have an extra bedroom attached to them. Is that a two-bedroom or a one-bedroom flat? Another might be my study. Is my study a bedroom or is it a study? It was used as a bedroom by the previous occupier, but now it is a study. These are just three examples of difficulties from the very start and the most simple part of the Bill: that is, the description of a bedroom.
Lord Freud
Certainly, the study of the noble Lord, Lord Foulkes, would seem to me to be a bedroom. However, box rooms without opening windows normally would not count as bedrooms. There is a series of rules that we will go through as we work through the implementation planning with stakeholders.
Lord Foulkes of Cumnock
Then you tempt tenants to board up their windows, as some owners used to do when there were window taxes.
Lord Freud
The coalition Government, my Lords, are not Queen Anne and we will resist any of those blocked up windows, which still blight many villages and which I know the noble Lord is very concerned about.
This is more than just a savings exercise. Housing benefit payments in both sectors will become more balanced in a way that will restore fairness, encourage better use of our existing social housing stock and encourage more people into employment.
The noble Baroness, Lady Sherlock, asked about the impact on children in particular. The impact assessment shows that claimants with children are less likely to be affected by the measure than those without children. Only around a third of the claimants potentially affected have children living with them. DWP officials have been working very closely in this area with officials from DCLG, the Department for Education and HMT.
It is reasonable to expect people living in the social rented sector to make choices about the affordability and the size of their accommodation, just as those in the private sector, and those who are not on benefit, have to.
My noble friend Lord Kirkwood spoke about transition and phasing. I should remind the Committee that these measures were announced in the summer of 2010 with a view to their taking effect, as has been observed, in April 2013. We think that this provides adequate lead-in time and we aim to have regulations in place by April 2012 to allow for a full year of implementation. If you like, you can look at that period as the transition phase, as people make appropriate arrangements.
Let me move on to Amendment 48, which comes in two parts. The first part would place a duty on social landlords to find suitable alternative accommodation for claimants who are underoccupying their property. If a smaller property cannot be offered to the claimant’s household, the size criteria measure would not apply. The second part relates to those who live in significantly adapted accommodation, and I will come on to that shortly. We are working closely with the Department for Communities and Local Government, and others, as we explore ways to best support landlords, local authorities and tenants, leading up to the implementation of this measure. That work is ongoing, and we will look at how we can work to ensure that claimants’ options are clearly set out, well in advance of the measure coming into force in April 2013.
It is important that local authorities and other providers of social housing make more effective use of their stock, and this measure, alongside the Localism Bill, will provide not only a greater incentive but a means for achieving that. This measure is about asking people on benefit to make realistic choices about the affordability of their accommodation when it is larger than they need. It is in the interests of social landlords to make the best use of their stock in order to make sure that tenants are able to pay their rent. For this reason most landlords would try to offer alternative housing options whenever they could. The specific duty on social landlords in Amendment 48 is therefore unnecessary and would raise important concerns around control, classification and enforceability. We do not want to impose regulations on to social landlords just for the sake of it.
The Government are providing funding to councils—£13 million over four years until 2015-16—to assist them in supporting underoccupying tenants who wish to move, as well as funding an action team within the Chartered Institute of Housing to work with all social landlords to help them to promote moves. The Government are investing £4.5 billion to help to deliver up to 170,000 new, affordable homes over the next four years.
This amendment would also exempt claimants from the measures where no suitable alternative accommodation is available. However, we expect that many people will decide to remain in their existing property, and make up the shortfall, even if an alternative offer of smaller accommodation is available, so it is likely that such an exemption would be an expensive waste of money in many cases. Of course, without a definition of suitable alternative accommodation, it is not easy to estimate how much this exemption would cost, but let us be clear that it would be extremely complex to deliver, and undoubtedly place a significant dent in the expected savings that would need to be found from elsewhere. I do not think this is a sensible way forward.
I understand that there are concerns about the supply of smaller properties. Claimants affected by this measure will have to decide whether to meet any shortfall themselves—from their earnings for example, or they could take in a lodger, or someone they know, to fill the extra bedrooms. If they do decide that moving to a smaller property is the only option to avoid getting into arrears, the social rented sector should not be seen as the only option. Private renting may be an appropriate alternative for some of those affected.
Changes being taken forward by the Department for Communities and Local Government through the Localism Bill will make it easier for councils and housing associations to move underoccupying tenants. However, this is not just about landlords. Some tenants can, and perhaps should, take more responsibility for arranging a move themselves. The new national homeswap scheme, Home Exchange Direct, will increase opportunities for social tenants looking to move through mutual exchange. Home Exchange Direct brings together the four internet providers of mutual exchange services to offer tenants more choice over where they live. Ultimately, landlords in Northern Ireland, Scotland and Wales will also be able to join the new scheme.
Amendment 34A also probes the availability of suitably sized accommodation. The provisions in subsection (3) will restrict how the other powers relating to the provision of housing costs may be used. Adding a line in subsection (3) to take into account the availability of suitable accommodation will not limit the way in which those other powers can be used. I take it that this amendment is really intended to ensure that claimants are unaffected by the size criteria in circumstances where no suitable alternative accommodation is available, and I have already made my thoughts clear on that. I recognise that, for some households in certain circumstances, moving may not be appropriate or should be delayed. Local housing authorities are best placed to take into account individual households’ circumstances. Where it is appropriate, they may offer help to meet a rent shortfall through the discretionary housing payment scheme.
The question of how people might respond was raised by my noble friend Lord German and the noble Baroness, Lady Hollis, who I congratulate on her speech. She has made a series of excellent speeches. The most up-to-date evidence is the survey by the Housing Futures Network on claimants’ behaviour, which came out recently. It showed a variety of initial reactions. Twenty-five per cent of respondents said that they were quite or very likely to downsize; 50 per cent said that they were unlikely to consider moving; 29 per cent said they would be quite or very likely to move into work or increase their hours; and around 15 per cent said that they were quite or very likely to take in a lodger or offer a spare room to a family member. Therefore, around 65 per cent of the survey’s respondent group are looking to change their behaviour. In the interests of full reporting of that survey, I should add that 35 per cent said that they were quite or very likely to run into arrears. Clearly, over the next couple of years we will look at putting strategies in place to make sure that that does not happen.
The second part of the amendment would provide an exemption from the size criterion measure for those living in significantly adapted accommodation. I appreciate that within this amendment there is acknowledgment of the need to draw a line somewhere and not just exempt all claimants in any form of adapted accommodation. I have noted the different views put forward in this Committee on how we might begin to do that.
The noble Baroness, Lady Lister, raised the question of disabled children. We are looking at ways to limit the impact on disabled children effectively and in an affordable way. I am sure she will understand that I do not want to comment today on the specifics of that, but I can assure her that very active consideration is going on. I should add the reminder that over this SR period we are already spending a lot of money—a total of £190 million, of which £130 million is for discretionary housing payments.
Since the measure was debated in the other House in May—I think the noble Baroness, Lady Hayter, was right about that—we have looked in detail at the possibility of an exemption for a tightly drawn group living in adapted accommodation. The work that we have undertaken to look at this in detail, in conjunction with various stakeholders, has revealed that such an approach is complex and has drawbacks. The issues that have been highlighted are finely balanced, so I should like to take a little more time to deal with them. My department is working closely with officials from the DCLG. We are continuing to talk to stakeholders as we do so. I hope to return to this matter when we debate Clause 68, and certainly by the time we get to Report if that is too tight.
My response to the question of my noble friend Lord German on the evaluation of the reforms is that we intend to undertake independent monitoring and evaluation to assess the impact of this set of measures and the changes in the social rented sector, and we expect the research to be undertaken over a two-year period, 2013-14, with preparatory work starting in 2012-30.
With that in mind and the assurances I have given more generally, I ask the noble Baroness to withdraw her amendment.
Baroness Hollis of Heigham
My Lords, first, I thank warmly all those who have taken part; it has been a helpful as well as a highly focused debate on the issue of underoccupancy and leads us usefully into some of the other debates that we are to face.
I do not think that the Minister addressed the issues raised in full. My noble friend Lady Turner talked not just about the difference between stock and a home but about the need for local support, and so on, as you get older, and the fact that we may cut all the connections which the big society and localism are urging us to strengthen. We did not have a full reply to that. The noble Baronesses, Lady Thomas and Lady Wilkins, talked about the cost of adaptions to spare bedrooms. We will come to greater detail on that when we discuss disability issues. About two-thirds of those who are regarded as underoccupying by DWP criteria have a degree of disability. It will be difficult to decide where we draw the line.
Then there was the issue of the difference in localities. The noble Lord, Lord Wigley, and my noble friend Lord Foulkes, as well as my noble friend Lady Hayter, in a powerful speech about Lambeth, showed that in each of these cases the stock was not there to deliver what the Minister seeks. I attempted to throw in some evidence from rural Norfolk. The division was between those of us who regard the definition of underoccupying that DWP proposes to adopt as targeting intrinsically—an opinion that I share—and those of us who say that if it is too tight, none the less the transitional arrangements are not sufficiently generous to make it possible even to move in that direction.
Members of the coalition Government have raised the issue that we need discretionary money. There is not enough of it, as I am sure that the noble Lord, Lord German, will be aware. My local authority ran out half way through the year, and it was helping only a couple of dozen families. The noble Lord asked about exceptions, but we will have definitional problems there. He asked for transition time for stock balancing and made the point about bungalows, which is absolutely right. That will take a decade or more to achieve. On the point about unacceptable process made by the noble Lord, Lord Kirkwood, and the need for a safe transition process, frankly we will have had a further two social security Bills—as I would like to call them—in the intervening stage before we can address that.
I found the Minister’s answer deeply disappointing. The two words that he was using were “fair” and “choice”. I think he said that it was not fair that social tenants should have a spare bedroom when other people might not be able to afford such; that there should be better use of accommodation for families who are overcrowded; and that it was right that the social sector should continue to contribute £0.5 billion or so to the proposed expenditure cuts of £2 billion to housing benefit. As for better use, only about 5 per cent of housing benefit tenants are overcrowded. If we had the stock available to meet the requests of those who wish to move, we could probably meet that overcrowding today. As for the Minister’s point about home swap, frankly, under different labels, we have been doing that for decades. There is nothing new there, but I welcome the fact that the Minister is looking at room size.
The key question is why the DWP is not accepting what I understand to be the DCLG definition. That means that on 2 April 2013, there will be a family in Norwich in bed-and-breakfast accommodation who have been lingering there for a couple of weeks, to the distress of the children, but technically they require two-bed accommodation if they are not immediately to find that their HB does not meet their rent. The local authority and the housing association, because we jointly have a choice-based letting system, only has three-bedroom houses available. Will the Minister tell me what we do? Do I say to that family that they must stay in an B&B for yet another fortnight or another three weeks until possibly the perfect fit of a two-bedroom property comes up in a place near where their children have started going to school, or do I say they can move into a three-bedroom house but that they have to take the hit? The local authority may help them with the first month or so, but after that they are on the own and will have arrears, and they may go back into the recycling of bed and breakfast accommodation.
As someone who is intimately involved in this, I am afraid I know that that is what we will be facing on day two or day three after 1 April 2013, and the Minister must tell us what we say to that family: move into accommodation that is notionally too large, not by DCLG standards but by housing benefits standards, and pay the price, or stay put in bed and breakfast accommodation, with everything that we know happens to children in that situation and how damaging and stressful it is for the family concerned. The noble Lord emphasised that there are choices in what people can afford—there is no choice. His concept of fairness seems to run like this—I think this is how the syllogism worked. We start with a definition that is tight, in my view too tight, which requires 670,000 families to move, two-thirds of them with a degree of disability. Yet knowing that, we do not have the property, and we do not expect the tenants to move because they cannot. They have no choice. We then, thirdly, go on to fine them for something they can do nothing about.
I do not believe in my wildest moments that the Minister would regard that as fair. It is not fair. We all know it is not fair. A transition arrangement would be fine if it is going to be long enough, but that takes time to adjust the stock, but it is not fair to punish people for something over which they have no power to change and in which they have no choice. I am hoping the Minister will rethink this because many of us feel very strongly indeed. There are various aspects of it that I perfectly well understand, such as the need to try to cap HB expenditure. We will come back to why that is happening, but it is certainly not because of this. It is happening, as the latest reports from the chartered institute and the property federation show, because of the increase from 49 per cent to 52 per cent of the case load in the local housing allowance in the south of England, which is more expensive with a higher number of claimants. It is nothing to do with this at all. I hope the Minister will run that when we come to that debate.
Does he suggest that it is fair to punish tenants for something over which they have no choice, in a way that is antithetical in every other aspect of social security legislation of which I am aware? We sanction when people could and should change their behaviour. If they cannot, we do not; full stop. Yet with this the Minister breaches that profound principle to benefit policy in this country, and I deeply hope, because I know he is a decent man and I believe he genuinely holds to concepts of fairness here, that he will think again and hopefully be able to change his mind before we come back to this on Report. I beg leave to withdraw the amendment.
“( ) Regulations under subsection (3)(a) must ensure that payment for mortgage interest continues to be made available long-term for people acquiring a home via the Home Ownership for People with Long-term Disabilities (HOLD) scheme.”
Lord Rix
My Lords, I assure the noble Lord, Lord Foulkes, that I have spoken at the Royal Albert Hall, the Royal Festival Hall and in a field at Cardiff Castle, and I trust that your Lordships can hear me in Committee Room 4A.
It is perhaps appropriate that with Amendment 35 I am in pole position in this vast group of amendments, for I am putting forward the case for people who reached the back of the grid only some 20 years ago and who had never been allowed near the track before then. I am of course talking about people with a learning disability. As your Lordships are aware, this Bill aims to introduce regulations laying out not only how housing benefit costs can be integrated into the universal credit but how mortgage costs would in future be covered in this context.
The purpose of this amendment, tabled in my name, is to ensure that disabled people have opportunities to buy a property via the home ownership scheme for people with a long-term disability, otherwise known as HOLD. Until October 2010, disabled people were able to access the higher rate of support for mortgage interest, or SMI, which meant that some mortgage providers were willing to lend to people with a long-term disability under the HOLD scheme by providing very specialist mortgages. The Royal Mencap Society, of which I have the honour of being president, believes that, contrary to all expectations, more than 1,000 people with a learning disability have been enabled to buy their own homes by this route. There are many more who hope and are able to follow in their pioneering footsteps. However, the abolition of the higher rate for SMI has meant that these mortgages are no longer available. This route into housing for people with a learning disability has, in effect, been closed down.
The purpose of the amendment is, effectively, to reinstate this route of home ownership for disabled people. It would also ensure that the Government’s support for care in the community continues to be a reality. Turning again to the analogy of motor racing, I am concerned that if we do not take appropriate action on this point now, people with a learning disability could be forced to take a prolonged pit stop, during which others will continue to lap them in the race to secure a decent and comfortable home.
In this group I support Amendments 36, 38, 39, 79, 80, 81, 82, 83 and 84. I beg to move.
Lord Kirkwood of Kirkhope
My Lords, I shall speak briefly to Amendment 36. This group is not as complicated as it looks because there are two sets of mirrored amendments. I look forward to the speech of the noble Lord, Lord Best, whose knowledge is well understood in this House. The meat of the group is to do with the exceptions, which relate, as the noble Baroness, Lady Hollis, accurately said, to our earlier debate.
Amendment 36 does a slightly different thing. Before I speak to it briefly, I shall refer to what I said in the previous session of the Grand Committee. We are all under pressure to disaggregate groups of amendments because the people who are promoting the amendments think that they get better consideration in the Government’s reply if they are considered individually. It is better to have a debate around a wider set of amendments but it will not work for the purposes of the people who tabled them unless the Minister is able to say something about individual amendments. If he cannot, the flexibility in the Government’s position cannot be properly understood and appropriate arrangements cannot be made for Report. The Minister has a very difficult job because there are many amendments on the Order Paper, but they are all important in their own way. If he can address them individually to the best of his ability, that would be a favour.
Amendment 36 tries to lift and lay the existing protections in the current provision of housing benefit in the private and public sectors under the Social Security Contributions and Benefits Act 1992. Clause 11 is very regulation-oriented. Its last three subsections refer to regulations that determine a whole series of things and are the basis for the amount of housing costs. What Clause 11 does not do is provide for entitlement to be related to rents in individual localities. These are key concepts in the existing system that we want to make sure are enshrined in the new provision under universal credit.
Lord Best
I am glad to start with that affirmation in advance. I am speaking to Amendments 38, 39, 40, 42, 43, 44, 79, 80, 81, 82, 83 and 84. This group of amendments relates back to the underoccupation penalty, about which we have heard so much.
I was deeply impressed by the array of speeches from the noble Baronesses, Lady Hollis, Lady Turner, Lady Lister, Lady Sherlock and Lady Hayter—the opposition Baronesses. I wondered what the plural was and I thought of it by the end: it is “a battery of Baronesses”. I thought that I might feel annoyed that they had stolen all my speech in various instalments, but I did not. Instead, I felt admiration and was in entire agreement with what they said.
My amendments in this group include two, Amendments 44 and 84, which relate to the fundamental point here: the definition of an underoccupied home, one in which people will either pay a penalty, have to move or make some other arrangements. The amendments suggest that we should stay with the standard that we have used in the past; that is, the standard used by the Department for Communities and Local Government and the Tenant Services Authority. This allows you the basic bedroom standard plus one bedroom. The amendments call for that status quo to be resumed. I have been involved in housing matters for some 42 years. During that time, we have grappled a lot with issues around underoccupancy in managing property that I have been responsible for and trying to incentivise people to move when that has been sensible. I do not think that it is possible to insist on the basic bedroom standard and expect people to live in the homes that they would then be required to live in. That is not how we occupy our properties in this country; 83.9 per cent of owner-occupiers fail this test straightaway. Most other people, in these terms, underoccupy the homes that they live in. Indeed, we build accommodation on the basis that you are going to underoccupy it. The housebuilding industry knows that people like to be able to tell their parents that they have bought a three-bedroom house. It is actually a two-bedroom house with a box room added. We do not expect people to occupy all those rooms in the real world of owner-occupation, and people move when they fill them up. I cannot believe that social housing tenants’ lives are so different that they will be able to cope with the basic bedroom standard.
The noble Baroness, Lady Hollis, gave some illustrations. The example that I might well have quoted was read out by the noble Baroness, Lady Lister—I received the same, very impressive e-mail about a family with two daughters. I give my own example. Let us try not to pull the heart strings. It is just an ordinary case of a family where there are two girls, of 14 and nine, who are not at the moment sharing—thank goodness, because the teenage girl of 14 does not want to share with her nine year-old sister. People have lives to lead as well as homework to do; they want to invite their friend in and listen to music or whatever they want to do. The 14 year-old does not want to share with a nine year-old who goes to bed at a completely different time. Theoretically, they have to move out. They will move down from a three-bedroom to a two-bedroom home. However, it will not take long before the 15 year-old is 16 and can get a room of her own. They can then move back again—of course, the former home will not be available. It will not be long, though, before that older girl leaves home, and then the family will have to move out again. This is ridiculous—people moving around to try to fit in with the rules.
Let us face it: the impact assessment makes it quite clear that it is about saving money. Reducing the cost of housing benefit is of course a very important objective, but the great majority of ordinary people, even those who do not have small children or children of the wrong sex who will not be able to be fitted together in the right boxes, need an extra room. Their children come back—does no one realise that they have not gone for ever? Sometimes, their coming back saves other people a lot of money because the parents will put them up and look after them during some period of crisis in their lives—marriages break down; all kinds of things happen. Indeed, you in your older age or even in your middle age may get sick and need a member of the family to come back and occupy the spare room and a keep an eye on you for a bit. To have that one spare room available, even when you do not have children to put in it, is the way that the rest of us live, and it has to work for social housing—I have never found a way of persuading people otherwise. This measure is a way, I fear, of raising money. It is a fundraiser, because almost nobody in these circumstances will move. They will just have to pay—or forgo, as it is—£13 a week, which is a serious amount of money for people on very low incomes. It begins to tot up.
The consequences of that will be shared. They will be felt by the individuals, who try to cut their living standards at a time when fuel bills and everything else are rising. It will be felt also by the landlords, because it will be extremely difficult to collect the money which has not been received by way of housing benefit. That means that arrears will begin to accumulate.
At first, landlords will be tolerant and helpful and try to see this through, but eventually—and I have been responsible for social housing—you get to the point where, pour encourager les autres, you have to proceed with eviction. After a while, arrears become too much. If they cannot be paid, people are going to have to be moved out, and then you get all the cost of that.
I cannot believe that people are going to move. It costs a great deal to move. Your carpets will not fit the place to which you are moving; your curtains will not fit. You have to pay disconnection charges for your electricity suppliers, and so on. People are not going to keep moving; they are just going to be stuck there and have to pay up, or forgo the money. I do not think that it is fair. The rest of us do not feel, for a moment, that that is how we would expect to live. I do not think that people, just because they are in social housing, should be expected to.
The amendment says that if you have two rooms which, using the basic bedroom standard, would be regarded as unoccupied—they would probably be a study or whatever—you would pay the penalty, but you would not do so for one bedroom, using this very tight definition. That is the effect of Amendments 44 and 84.
Is there a solution to the problems of underoccupancy? I am not going to burden you with a long speech on this, but underoccupancy is mostly about people over pension age. They are specifically excluded from this measure. However, they are the ones who are actually underoccupying, often in a three-bedroom home, and who—if only we could find the incentives and the ways of moving people—could be moved on, and families could take those homes.
I declare my interests: I chair a housing association called Hanover. Hanover has 19,000 properties, but they are all retirement properties. We concentrate exclusively on older people.
Our target is the underoccupying elderly person, whose home, even though they feel quite reluctant to move, is not suitable any more. If it has three bedrooms, stairs, a garden that needs to be kept up and heating bills that are higher than they should be, it is a great idea if we can move people out of those three-bedroom houses. They are desperately needed by families. Housebuilders have tended to build just flats, and not houses with gardens, so these are really valuable to the rest of society. The incentives to move are what we need.
We have shown in my housing association—others have done just as well—that if you provide something that is really good, then people will move. They are not going to go to scruffy old bedsits in sheltered housing that has seen much better days. But they will go if it is to somewhere manageable, clean, bright, open and companionable.
Lord Best
Well, preferably a bungalow, but mostly we just do flats, but they can be smart apartments. Yes, you could move.
There are some 240,000 families who are overcrowded. We have far more elderly people who are underoccupying than that. We could give incentives to older people, the incentive being the really nice apartment elsewhere. It gives you two-for-one, because you release your family home. This is not the approach being taken in this legislation.
If we are going to have to reconcile ourselves to there being this penalty, then the other amendments in this group come into play, which are about exemptions, exceptions and letting some people off. I hope it does not come to this, but if it does, a series of exemptions is outlined in the amendments that follow.
Amendments 38 and 79 would remove the underoccupation penalty for the 100,000 properties that have been specially adapted to meet the needs of a disabled tenant—we have heard a little about that already. It would be daft to move a household with a disabled family member to smaller premises if the costs of fitting out the new home—for example, with a level-access shower or removal of steps—far exceeded the savings from cutting the housing benefit and left wasted adaptations behind because no other household needed the particular adaptations made to the previous home.
Similarly, Amendments 39 and 80 would exempt the 200,000 households in receipt of disability living allowance, or the new personal independence payment, in the same way that DLA recipients have been excluded from the proposed total housing benefit cap. Some extra space for those with disabilities can even save money when that allows a carer to move in during a difficult period for the disabled person, saving the cost of hospital or residential care. Amendments 40 and 81, which are supported by the Fostering Network and Barnardo’s, as well as the housing charities, which are behind all the amendments, would exempt properties where families are providing foster care placements.
I am sure that it is simply a fault of the drafting, but, at present, the Bill would not count foster children as part of the household. Therefore, any rooms they occupy would be classified as unoccupied. That is clearly nonsense, and I am sure that the Minister will explain how that will be put right in future.
Baroness Hollis of Heigham
Am I right in believing that, to become a foster carer, you must have a spare bedroom? If you have a spare bedroom, you are hurt and hit by the HB rules.
Lord Best
I fear that that is exactly the position. Others may wish to come in on the amendment about foster parents.
Amendments 43 and 83 would not require an underoccupying tenant to move out where there was simply nowhere for them to downsize to—the fundamental point behind the amendment of the noble Baroness, Lady Hollis. For example, the National Housing Federation has demonstrated that about 180,000 social housing tenants would be classified as underoccupying their two-bedroom homes and would need to move on, but that only about 68,000 one-bedroom social housing flats come available for letting in a year. Even if every one of the one-bedroom flats was allocated to those who are downsizing—which of course would be impossible as there are serious demands from tens of thousands of other such households—it would take years before they could be accommodated.
In the past, we built social housing between the world wars and afterwards. Mostly, we built three-bedroom housing. Now we have a lot of households that require something smaller, but we do not have enough houses to put them in. Here, again, the impossibility of people moving means that the exemption would kick in. If they were expected to downsize into less secure private rented properties, rents are likely to be much higher and therefore the benefit costs, the universal credit costs, would be much higher—about £66 per week more in south-east England. That is not a great saving. The housing benefit bill would be likely to rise dramatically although people were occupying less space.
Moving creates the familiar barrier to employment. Moving to somewhere with a higher rent itself intensifies demand on the private rented sector, which will push up rents more generally.
Of the amendments, my preferred option is to define underoccupying as exceeding the bedroom standard plus one—that is, having two “spare” bedrooms. That would cut the gains to the Government from the underoccupation penalty to 150,000 households from the 670,000 that the Government are expecting to be caught by the new penalty.
If the Government cannot accept that, I hope that, alongside the exclusion for older people—the category most likely to be underoccupying at the moment— exemptions could be put in place for disabled people in adapted property, recipients of disability allowance, families classified as underoccupying because foster children are not counted, those unable to move because no suitable alternative exists, and those in supported or sheltered housing where a spouse or partner dies or leaves them and who are below pensionable age and would be compelled to move out. Added together, those exemptions would certainly reduce the hardship and extra costs implicit in the underoccupation penalty. I look forward to hearing comments from other noble Lords and the reaction of the Minister.
The Earl of Listowel
My Lords, before I speak to my amendment in this group, perhaps I may follow the noble Lord, Lord Best, in his concerns about the impact of this move to an underoccupation penalty, particularly on families. It was encouraging to hear from the Minister the results of his survey and some positive outcomes to the changes whereby people will look for work, or think of getting a lodger. However, what concerned me about his comments were the large numbers who might go into arrears. I have observed from my experience of young people leaving care and of other families that people leading chaotic lives tend to think from day to day.
Therefore, given the example given by the noble Baroness, Lady Hollis, if a family in bed and breakfast accommodation were offered a three-bedroom house that seems to suit them but may be too large, they may say, “We will take it and deal with the arrears when they come. We will not think of the future”. Then they end up in arrears and in serious difficulty because they are not able to cope with the worry of being in debt and they do not know what to do. I am grateful to the noble Lord, Lord Best, for highlighting the fact that this issue needs close attention from the Government, and I look forward to learning more about it. He has a good point. This is a serious worry with the underoccupation penalty.
The noble Lord also raised the question of foster carers. Under the current absurd arrangement, foster caring and providing a room to a foster child would not count as a room and in this scenario would count against one. I am not expressing that very clearly, but I think your Lordships understand what I mean. I suppose it might be argued that this will be an incentive for some people to foster if they have a spare room. If the Bill is changed to be made sane, they would not be caught by this part of the legislation.
However, I have two further thoughts. First, there is a real question as to how far one should professionalise foster caring. People should go into foster caring because they love children and want to provide a good home to a child. I know that there is a debate about the professionalisation of foster care but, in principle at least, people should be motivated by caring for children, not making a bit of extra money or saving some money. Secondly, the harms that may arise from this proposal by far outweigh any potential benefits of that kind. If such families get into arrears there is perhaps the cost to the mental health service as the family breaks down under stress. There is the cost to the education system as their children fail. One needs to look at the bigger picture rather than just think about short-term savings.
Perhaps I may sum up. I apologise for using my laptop on this occasion; however, I cannot get internet access today and I was unable to download my notes and print them out. My Amendment 85 is modelled on the previous amendments of the noble Lord, Lord Kirkwood, and I apologise to the Committee because I drafted my amendment rather poorly. I should have referred to children looked after by local authorities rather than those cared for by them. My intention is to gain an assurance from the Minister that families who have their children looked after by a local authority may retain a room for that child to return to when he is ready. While a few children are adopted from care, most return home sooner or later, and it is right that they should have a room when that happens. It is important for the parents to retain a sense that their child remains their child and that they remain the parents. That is important because their children will normally still love their parents, however they have been treated, and will need to feel there is a place for them in their parents’ home. It is important also because the child will eventually return. Generally, we should strongly encourage these parents to retain their sense of responsibility for their own children. An experienced child and family social worker has reminded me that it will also be important for the child to know that his parents will be keeping a room for him. He will need to feel that he is still wanted and there is still a home for him with his parents.
In the year ending 31 March 2011, 3,050 children were adopted out of a population at that time of 65,520 children who were being looked after. Very few children, then, were adopted. Children who are subject to residence orders, or are being cared for informally by the Ryder family, are all the more likely to return to their families. Barnado’s has expressed concern about these children. This matter was also raised by the noble Baroness, Lady Tyler of Enfield, at Second Reading. There is a separate amendment in this group, which I support, on those particular groups of children.
I would be most grateful if the Minister could reassure me that families whose children are looked after by a local authority would not normally be subject to the underoccupation penalty. I apologise if the problem with my drafting has made it more difficult for him to reply. I would certainly find a letter acceptable if that seemed more appropriate in the circumstances.
I will not speak to my Amendment 86 because my understanding is that the benefit arrangements for care leavers are such that the concern I had is not an issue. I look forward to the Minister’s response.
Lord German
My Lords, I speak to Amendments 48C, 48D and 86ZZZA in my name. It is appropriate that I should speak after the noble Earl, Lord Listowel, because the issue he raised about care and children coming back from care is crucial. The three amendments in my name all relate to children and are intended to make sure that the suite of amendments here, which I have looked at very carefully, does not miss out one or two crucial groups relating to children.
Amendment 48C and Amendment 86ZZZA relate to disabled children. Amendment 48D relates to families with children in temporary care—and I echo much of what the noble Earl has just said about that matter. First, I turn to Amendment 48C and Amendment 86ZZZA. Families with a disabled child may have an adapted property that has a spare bedroom, but that spare bedroom may be needed for a carer to stay the night, or for a time when it is too disruptive for another child to share a room—that is a very crucial group of children. Disability comes in many forms. It is important that we reflect upon the nature of disability and how that might impact upon particular groups of children. I ask my noble friend the Minister to look at the issue of what having disabled children actually means in terms of the nature of their disability. It could mean not just that a family needs a carer, or equipment or a spare bedroom; it could be that the nature of the disability is such that disruption affects another child in the family in a way that they require a separate room.
The impact assessment carried out by the DWP says that for claimants themselves, or their partners, a bedroom for a carer who provides overnight support will,
“be taken into account in determining the relevant size criteria”.
I wonder whether there has been an error, because it seems very strange to me that the same provision does not apply to claimants’ children. I hope that the Minister can reflect that it is not just the claimants, but claimants’ children, who are important when it comes to disability. Many families with disabled children will have expensive adaptations to their homes. Forcing families with a disabled child to move from an adapted property—as we have already heard—in any field could be extremely expensive. As we know, disabled facilities grants often take a long time to organise. Forcing families with a disabled child to move could be very disruptive for both the child and their family.
The issue that the noble Earl talked about, which is the subject of another amendment in my name, Amendment 48D, is that of children in care for a short period. The noble Earl reflected carefully on an important group for whom the children’s home—that family connection—is still important. We need to avoid their home being taken away from underneath their feet. Parents whose children are in care for a short period will need to retain that spare bedroom to prevent additional barriers to their children being returned to them when the care period ends, for whatever reason. Where children are in short-term care, their parents will have that spare room as soon as their children are put into care when their children will not be living with them, but the room may be vacant for only a short period. It is impossible for anyone in the housing sector to second-guess when the child will be returned home, because the reason for them returning home will remain with the other agencies. It is important that we should not block that out and that it should not be treated as underoccupancy, because that will impact on those vulnerable children and their families who live in social housing at a time when they need intensive support to ensure that we do not encourage family breakdown.
Again, I wonder whether that is an unintended consequence of the Bill: that it will prevent families from having their children returned to them after they have been in care for a short period. It is not in the amendments, but the noble Earl talked about the fact that many children in longer-term care will also return home. The average length of time for longer-term care for children is only just over two years, so there is a wider group who are not reflected in this pair of amendments.
I also wanted to say a few words about foster carers. The danger is that this policy shift may force some foster carers to give up their roles, as well as discourage new foster carers from coming into the system. It will make it very difficult for social workers to place children in an emergency, which is what we need for many children. We have a national shortage of foster carers. About 10,000 are needed across the whole of the UK, and we need spare capacity in the system because many foster carers are short-term carers looking after some of the most vulnerable children, who are often children who have been abused.
I know that the Government do not collect data on the number of foster carers who live in social housing and that there is no breakdown of the number of foster carers claiming welfare benefits, but I am concerned that, because they do not have the figures, the Government do not understand the impact that this change may have on that group. If the Government have the figures, it would be useful to know them. I understand that they do not. The estimate is that about 2,000 foster carers will be affected. When we consider that we are short of 10,000 foster carers, we should not affect 2,000 in this way.
Lord German
My Lords, I was talking just before the break about the number of foster carers who will be affected by the proposal. We do not have the figures because the Government do not collect the right data, but the 2010 survey commissioned by the Fostering Network found that 6 per cent of all families lived in private or social housing. We know that the split between private and social is 32 per cent to 68 per cent. As there are roughly 45,000 foster families in the UK, if we take that figure, there would be approximately 2,700 fostering families in private and social housing and 1,836 in social housing, but those are extrapolation figures. I would be grateful if the Minister could assist us in that matter.
What is critical in this suite of amendments about children is that the Government do not jeopardise our caring for children with disabilities, and particularly our fostering system, by introducing measures that would penalise those groups of children. I hope that the Minister will be able to tell me that that is an unintended consequence, if people believe that we will impact on such groups of children. I hope that the Minister can assure us that those particularly vulnerable groups of children will not be affected by the Bill.
Baroness Hayter of Kentish Town
My Lords, I, too, shall speak briefly to Amendment 40 and Amendment 41, which stands in my name and that of my noble friend Lord McKenzie. As has been said, Amendment 40 seeks to ensure that the restrictions on the size criteria for social housing cannot leave a foster carer unable to meet their rent. As has been suggested, as currently drafted, the social sector size criteria and related benefit cuts would hit foster carers who claim benefit. As has been said by the noble Lord, Lord Best, that is because foster children are not counted as part of the household. Therefore, any bedroom that they sleep in is defined as being empty and underoccupied. The Fostering Network has warned that the failure to exempt foster carers from the penalty could lead to a number of them leaving fostering altogether.
As was suggested by my noble friend Lady Hollis in her earlier question, it is indeed a necessity that to be accepted for fostering, carers are required to have spare rooms in their homes for such children. Indeed, if you look at any advertisements for foster parents, they say that a spare room to foster is necessary. In addition, it cannot just be any old room; it is expected that most foster children will have a room to themselves from the age of three upwards, as specified by the minimum standards issued by the Department for Education and Skills. That age is well below the underoccupation rules for birth children who live with their parents.
We all know that social housing can provide a stable, high-quality environment in which to care for children who, for whatever reason, cannot live with their birth families. I am sure that none of us would want to exclude the occupants of social housing from acting as foster carers. I cannot believe that the Government intend that foster carers should face the underoccupation penalty. It is fairly obvious what impact that that would have.
Foster carers can claim housing benefit for the housing needs of their families, but the ones that they look after are not taken into account, which would mean that, just as with any other family, the rooms would count as being underoccupied, despite the fact that children sleep in them, and the foster carers’ benefit could be reduced by 23 per cent for the use of two rooms or 13 per cent for the use of one room used by a foster child. Many foster carers look after two or more children, especially those carers who deal with emergency needs, when a whole family can arrive together, and the availability of not just one but two spare rooms is crucial.
Most foster carers do not receive financial compensation for housing costs at present. They receive allowances towards the care, which include household running costs but not housing per se. Last year, the Government changed the law to exclude foster children from housing benefit claims. The Minister will recall that he wrote that this is because fostering allowances are intended to cover all the costs of looking after a foster child, including housing them. However, that statement is inconsistent with official information about the purpose of fostering allowance. The minimum fostering allowances set by the Governments in Northern Ireland, Wales and England do not include housing costs. In any case, the levels for recommended minimum allowances are far too low to provide realistic compensation for housing costs.
In case it is thought that discretionary housing payments may be available, it is true that foster carers are entitled to apply, but even if this concession was awarded it would be only to a small minority. As other noble Lords have said, there is already a significant shortage of foster carers. If there was a penalty for keeping a room in order to foster, some experienced carers might have to quit altogether. This could have a significant impact, especially in major towns and cities and other areas where rents are particularly high. Accommodation is in short supply, yet the demand for such carers is great. As the noble Lord, Lord German, said, there are about 2,700 fostering families claiming housing benefit. One thing being asked for through the amendments is that the cost of permitting it would be more than offset by the cost involved in losing foster carers, with children therefore having to be kept in care.
It is very hard to overemphasise the value of the work done by foster carers. I should like to take a moment to talk about two families I know, who between them have had more than 120 children through their doors. They have mostly been children who either have difficulties or disabilities themselves, or whose birth families are, for whatever reason, unable to provide a home for them. They do not always arrive in a nice planned way. They can come in the middle of the night, after the death or illness of their only parent, as the result of an assault or, as in one case that one of these families dealt with, when one of the child’s parents had been murdered by the other. The need for a home in the middle of the night and a room for those children cannot be stressed too much. These families are ready to take someone in, often very distressed small children. It is something of which we all need to be aware.
The Local Government Association is particularly concerned that if the proposal should remain unamended, and therefore reduces the likelihood of fostering, as carers are forced to give it up to avoid the penalty, it will be local authorities who pick up the cost, at a time when we are already short of foster families. It is fairly obvious that particularly vulnerable children make up a large proportion of those who are placed in emergency or short-term care. Therefore, we hope that the amendment will get a very warm response.
Amendment 41, in my name and that of my noble friend Lord McKenzie, is there to assist the Minister. It would make an exemption for foster parents to prevent their being subject to any accusations of abuse. I do not believe that there is such abuse, but certain papers like to run scaremongering stories about benefit claimants living in mansions, while there are blogs that talk about people living in enormous eight-bedroom houses in Chelsea, paid for by housing benefit. I have yet to find one. Amendment 41 seeks to protect foster carers from any such accusation. It includes defining,
“the type of property reasonably required for a household which is providing or routinely provides foster care placements”.
So it is to try and help the noble Lord in a very simple way.
The guidelines for good fostering are that there must be a spare room, and that no child over the age of three should be asked to share a bedroom. That is what we would call a suitably sized property, so I very much hope that the Minister can respond positively on the issue of foster care.
Baroness Campbell of Surbiton
My Lords, I support the noble Lord, Lord Best, especially on his amendment regarding the CLG criteria of one-plus-one bedroom. One thing that struck me is that we have not referred in this debate to people with fluctuating impairment who require overnight care but not on a regular basis. People with mental health problems, when they go into crisis, may need somebody to sleep in the bedroom next door for a month or two, and that is not necessarily counted as an overnight carer in considering criteria for an extra bedroom.
We should celebrate that 15,000 disabled people need overnight care in this country—that figure is given to us by the DWP. Has the Minister had discussions with the Department of Health about the implications of the changes to the housing and benefits extra bedroom situation for people with fluctuating impairments? Increasing numbers of disabled people are living at home in the community now, and that is to be celebrated, but many disabled people require the help of another human being in order for them to do that. Otherwise it is back to residential care and the old days of warehousing. This is another good reason to support the one-plus-one bedroom and if we cannot do that, then I certainly support all the exemptions that are called for in all the amendments.
Baroness Meacher
My Lords, I support all the amendments in this group, but I congratulate my noble friend Lord Best on his incredibly commonsense approach to this problem. It seems that allowing an extra bedroom would probably deal with most of the tragic exceptions that people have talked about—what a straightforward way to deal with those exceptions and normal life. I cannot think of any family that at some point does not badly need an extra room, and the case was so well put.
We talk about all the amendments individually, but what is so painfully obvious is that it is the combined impact of the changes in the Bill that are going to have such a devastating effect on so many people. It feels irrelevant to talk about ESA and people being reassessed and placed on to JSA, and therefore losing a section or part of their benefits, but the individuals at the front line are going to be hit by that, then they find their housing allowances upgraded in line with CPI, then they find that their housing allowances are pegged to the 30th percentile, then find that they have an extra room. Oh my God, their housing benefit will not cover the accommodation they are in and they are going to have to think about moving.
It is the impact of so many hits that feels petrifying, and perhaps the change that frightens me more than any is the pegging of housing allowances to CPI. If that goes on longer than two years—perhaps we do not pay too much attention to it because we assume that it will not—we are talking about families and households finding every few years that they have a growing gap between their rent and the allowances they are paid for housing. They will have to move, and move, and move—is that not correct?—over a period of time, into ever more distant areas, ever meaner properties, ever smaller properties. It is difficult to imagine the psychological impact on households of all these changes.
I do not know who devised this law, but I wonder whether whoever it was stood back and thought about all that. I know, and the Minister has mentioned many times, that the driving motivation behind the reforms is to provide an incentive for people to move into work. From where I come from, dealing with people with mental health problems, one thing that stands between them and work is their level of stress and distress and anxiety.
It strikes me that if all the legislative changes go through, we will create an even bigger gap between very large numbers of people who are prone to anxiety and depression—if not psychosis and other things that are even more problematic to deal with—and the labour market. That troubles me, because I respect the Minister’s commitment to providing an incentive for people to go back into work. I also know that he is very sympathetic and understanding about mental health problems. I would be interested to know what he has to say about the apparent contradiction in what the Government are trying to do.
Another aspect of this for people with mental health problems is that to force them to move away from wherever they are—probably away from the carers who might just about prop them up and allow them to survive and carry on—is the last thing we want. The underoccupation rule impacts even more, given the other provisions of the Bill. As I understand it, young people are going to be expected, in some circumstances, to share accommodation. There are an awful lot of people with mental health problems for whom this might be quite helpful. There are others for whom it might be a complete disaster. Indeed, let us not forget to mention the potential sharer. It might be quite difficult to share with some of our folk. We have to be sensitive to the impact, and the combined and compound impact.
I sympathise with the amendments that noble Lords have tabled about disabled people who have had adjustments to their homes, and those about looked-after children. Those are obvious and glaring problems. I would like to think that the Minister will think seriously about that, in the context that I know he very well understands.
Lord Wigley
My Lords, I speak very briefly in support of Amendment 35, to which I have my name, to endorse entirely the comments of the noble Lord, Lord Rix, in introducing this bank of amendments, and to support the other amendments that deal with disability particularly. In doing so I should declare my interest as vice-president of Mencap Wales. In fact, at the Mencap annual conference in Warwick on Saturday, there were people who asked specifically about these matters. They said, “They have taken away from us home ownership for people with long-term disabilities, and now they are going to start clobbering us on housing benefit, where people with disabilities may be in a particularly vulnerable position”. I should therefore like to ask the Minister, so that I can respond to people who raise these questions with me: do the Government still believe in home ownership for everybody, and if so, does that include people with long-term disabilities? If the Government, having taken away the previous scheme, are not going to put something in its place, surely that is a straight contradiction of what the party opposite has always put itself forward as believing in?
Secondly, with regard to people with disabilities and housing benefit—the amendments before us would make exceptions for them—I hope that the Minister will be able to spell out how he will ensure that they do not suffer. If the amendments are not acceptable, I hope that amendments will come forward from the Government on Report. If not, I hope that there will be an opportunity to vote on these matters to show exactly where each of us in each of our parties, including the coalition partners, stand on such a basic issue.
Baroness Hollins
I, too, support Amendment 35, as introduced by my noble friend Lord Rix. As we have already heard today, tidy laws are not always fair laws. I am concerned about some exceptional people whose needs cannot neatly be described and I hope that common sense will prevail.
I shall give the example of a young man with autism and learning disability, Theo. Since early childhood, Theo has loved and become very knowledgeable about cathedrals, churches and architecture. He is also a man with complex impairments and a history of behaviour which has challenged every shared setting he has lived in. With specialist advice from Housing Options, and support and endorsement from social services, his parents set up a safe and individualised housing and care package for him.
The Government’s view may now be that it has never been the intention that SMI would cover all a person’s housing liabilities, but Theo’s shared-ownership mortgage was offered precisely on the basis that it would cover the mortgaged part of his housing cost, as was DWP policy at the time. The past nine years of Theo’s life have been built on that. His home has provided the all-important stability that someone with autism needs; and his disabilities combine to make change much more disturbing than we would find it.
Theo has an interest-only mortgage, so the possibility of the acquisition of a valuable capital asset does not apply in his case. With careful management by his parents, he has been able to lead a happy life at a much lower cost to the public purse than the alternative arrangement of a secure hospital. However, the new FSA rules require mortgage-lenders to set aside more capital and to treat mortgages on shared-ownership properties as 100 per cent mortgages. The result is a sudden gap between the rate at which lenders have to lend—for example, 6 or 8 per cent —and what the new SMI rate, which I think is 3.63 per cent, will cover. In Theo’s case, this leads to a shortfall of £200 per month. You can imagine that the arrears are already quite high. A new mortgage would be at an even higher rate, but he would then have to find a 25 per cent deposit for his property. He does not have the money to negotiate another mortgage.
There has been quite a bit of publicity about the adverse effect of this reform on HOLD. Experienced housing experts say that fewer lenders are likely to want to deal with disabled applicants seeking this solution to support a non-institutional life.
Ageing parents of disabled adults have followed similar paths with the help of enlightened housing associations. Those parents have been making responsible arrangements in their own lifetime, hoping for some assurance of long-term stability and security for their child. Instead, Theo's parents now face the prospect of seeing Theo’s distress at being uprooted from his home and moved, probably, to an inappropriate and less sensitive institution, which will be much more costly.
As the noble Lord, Lord Rix, pointed out, there are probably about 1,000 customers with learning disabilities—0.4 per cent, I understand, of the total caseload looked at by the impact assessment. Some of those administering HOLD have suggested ways in which the cost of continuing higher-rate payments for this group of disabled people could be contained, but it would require acceptance that there are indeed exceptions to the rule.
Since the Poor Law 1601, society has tried to tidy away people whose needs do not fit present-day norms, but in today’s more enlightened society we have made huge strides towards creating an inclusive society in which every person's humanity and dignity are respected and in which they have a place regardless of the extent of the difference that the person presents. However, these gains are quite fragile and we need look no further than Winterbourne View to be reminded of the previous scandals in mental handicap hospitals such as Ely and Normansfield in the late 1970s. Surely, we must now realise that without adequate advocacy and diligence we could again allow such inhumane provision to be re-created—people shunned by society and placed out of sight and out of mind at considerable expense but in the interests of tidiness. The test of a humane society is how it treats its most vulnerable members.
I had little awareness of the lives lived by some people with learning disabilities until I had a disabled child. My eyes were opened. I should like the Minister to consider using the Bill to reinstate SMI at the higher level for people such as Theo, which would allow them the opportunity to live with dignity in their own homes.
Lord Boswell of Aynho
My Lords, I rise briefly and somewhat diffidently because I did not have the privilege of hearing some of the earlier exchanges, as I had other obligations at that time. However, I have been listening to the later stages of the debate and before I add one comment to it I want to make it clear that in no sense am I derogatory of the very real problems that disabled people face—and those faced by other people of particular categories, including foster carers and others. Indeed, a good deal of my trade, time, interest and passion in my previous vocation as a Member of the other place was directed towards these issues. Of course they matter, and the people who are experiencing them matter. They have complex and difficult needs.
At the same time, it is worth putting down a marker. My remarks are prompted by those of the noble Baroness, Lady Meacher, about the cumulative effect. Of course, in a sense, I entirely agree with her point about the cumulative effect of changes, but I am afraid that the argument runs both ways. If the effect is cumulative and poses difficulties for the individual, a cumulative set of concessions or changes to the package that the Minister is presenting to us also has implications for public expenditure. In our debates last week on disabled children, I made the point that I regarded their overall position as being one of particular pressure that required the Minister’s attention and the maximum degree of flexibility. While I do not for a moment resile from the arguments that have been put with great passion by noble Lords on the range of difficulties, we will not be able to meet all those requirements within the equal requirement that the Minister and the Government have for economies in public expenditure—and with the commitments that have been undertaken to secure the prize of universal credit.
What we must do—and I will certainly want to listen to the Minister’s answer on this—is ensure that we understand the implications, and that is why debate is so important. We should be prepared to make changes where the shoe pinch is particularly hard or where the interaction that the noble Baroness referred to may have taken place. However, we will not be able to solve all the problems of all the client groups, however good our intentions are, without making it impossible for the Bill to survive and be sustainable. The Minister has to answer in that vein, and I hope that he does so.
Baroness Wilkins
My Lords, further to the comments of the noble Lord, Lord Boswell, I ask him whether it is fair that this group of people should be asked to pay for the country’s deficit. It seems to fall particularly hard on this vulnerable group of people.
I support the solution of noble Lord, Lord Best, in these amendments and, if not, I support all the exemptions that have been spoken about, particularly those in relation to disabled people. It is very hard for non-disabled people to recognise how important our homes are to us, particularly when you can get into few others. The way that our homes are configured and designed means that they either enable us to live independent, contributing lives or completely disable us. The two steps that were in my house, as they are in every other house in my street, would completely have disabled me had they not been removed. They would have meant that I needed help from someone else to wash or to provide my food. I would not even have been able to answer my front door to take in a parcel from a neighbour. They would have removed any ability for me to contribute to my community.
Lord Whitty
My Lords, the Government will have to recognise the anxieties that lie behind the bulk of amendments in this group. I want to take a step back and take a slightly longer view. Whether they should be in this group or not, there are three clause stand part amendments, one of which relates to this clause, in the name of my noble friend Lord Kennedy of Southwark; the other two are for later clauses and stand in my name. Clause stand part amendments are either a subtle probing amendment or a blunderbuss, depending on your point of view, but they are a request for the Government to think again.
I am prepared to accept that the Government do not intend by the provisions to place a disproportionate burden on the disabled or to leave foster parents out of consideration. They have three aims: the big one, on which we all agree, is to rationalise the whole system of welfare, eventually into a system of universal credit; the second is to save money; the third, which has been less referred to, is to reflect how to deal with a severe shortage of housing in general. The reason why we have the provisions, much of which we have been debating during the past hour, on how to move people to more appropriate—or, in some cases, less appropriate—accommodation is because there is such a squeeze on social housing, in particular, but also on other forms of housing to which housing benefit makes a contribution. That is a housing policy issue, and is in a sense also being dealt with in parallel in the Localism Bill, where some measures would reinforce the direction of this Bill, some positively and some negatively, but some move in a different direction. In that context, particularly in relation to changes in security of tenure, it would actually make some of these problems considerably worse.
The clause stand part amendment and another group of amendments that I have in a later group, which I fear that I will probably not be here to debate if we reach them tonight, are intended to ask the Government to think again. We all want the housing costs element eventually to be included within universal credit, but there are huge complexities in the housing cost element. The Government have attempted to address them, but they make the administration somewhat worse and more complicated by moving housing benefit away from administration of local authorities, separating the council tax benefit from the housing benefit proper and in a different context putting maximum figures on housing benefit and provisions in the Localism Bill that relate to affordable rents and caps on rents in social housing.
There is a whole nexus of issues which are essentially housing policy issues, and they reflect the very serious shortage of housing in all forms of tenure, whether we are talking about owner occupation and availability of a mortgage for first-time buyers, the private rented sector or the social housing sector. If we are to move a housing cost element into the universal credit, a lot of those issues—or at least the direction of travel on all those issues—need to have been established first. I am aware that the Government intend to make a statement on housing in the next couple of months, basically led by the CLG end. Whether it will be definitive or not I am not clear, but until we have some clarity about how we are dealing with future subsidy for housing, whether on the supply or on the demand side through housing benefit, as well as future changes in tenure and tenure law, which will affect the supply and flexibility of people moving to appropriate accommodation, it is difficult to construct exactly how the housing costs element will look.
My suggestion in my subsequent group of amendments is that we should be prepared to take a longer run at the housing costs element than in the rest of the rationalisation of the programme. The Government should at least give themselves the option of doing that, because otherwise they are going to flounder on detailed but vitally important aspects of housing benefit and housing tenure, which affect lots of different interest groups in different ways and which will slow them down in attaining their goal of universal credit.
I do not want to say any more tonight on that, although I may well return to it at a later stage. The whole of the discussion in the last hour and a half shows how complicated changing housing benefit and housing rules are, whether looked at through the prism of welfare reform or of housing policy. The Government in the timetable that they have set themselves for the legislation and the implementation seem to be biting off more than they can effectively chew. I hope that the Government see this and do not slow down the design of the universal credit system but take the time in a parallel track to look at how housing policy as a whole—the supply as well as the demand side—is addressed, and then start to construct a housing cost element relating to the housing market and the different forms of tenure as a whole. If they do not do that, I fear that they will fall flat on their face, and I do not want that because I agree with the ultimate objective. But the housing side of it is far too complex, and some of the discussions that we have had in the past hour and a half indicate how complex it is and how emotive it can be and how the Government can find themselves in all sorts of trouble, which will slow down their ultimate objective. I pass that to the Minister as a suggestion, but it is one that at some point the Government need to take seriously.
The Earl of Listowel
My Lords, I am sure that the Minister will be keen to reassure the Committee about the concerns raised, and I know that the Committee will want to hear those reassurances, so I shall be as brief as I can, but I am prompted by the eloquent speeches of the noble Lord, Lord German, and the noble Baroness, Lady Hayter—particularly the case histories that she presented—to think in particular of large sibling groups of children taken into care. We are often talking about large families, dysfunctional families, where the parent has a child who is taken away, then another child who is taken away and then another child who is taken away. It is often very important for those children that they stay together with their brothers and sisters. Of course that means that some foster carers need to have many rooms to provide that capacity. In the past, we have failed those children. It has been inconvenient to keep them together, so they have been separated.
I think of one now middle-aged woman who was separated from her five brothers and sisters when she was in care. She was so profoundly troubled by her experience that she set up a charity, Siblings Together, and now organises holiday schemes so that young children in care can spend at least their holidays together with their siblings. If they lose their parents, at least let them keep their brothers and sisters.
I do not want to pull too hard on the heartstrings, and I know that the Minister has met the Fostering Network. He has already provided reassurance on several of its concerns, so I am sure that he will be as helpful as he can on this issue as well, but I omitted to raise this earlier and I wanted to raise it with him before he replied.
Lord McKenzie of Luton
My Lords, it is with some trepidation that I speak in this debate having released, in the terms of the noble Lord, Lord Best, the battery of Baronesses from this side of the Committee. I am not sure that I am not better suited to sitting on the hill at a safe distance and watching all this from afar.
However, these are hugely important issues. One thing seems abundantly clear on the basis of this debate and the previous one: what is in the Bill simply cannot stand. We recognise the issue of underoccupation. As the noble Lord, Lord Best, said, part of that is dealt with by definition: the extra bedroom in itself is part of the solution. My noble friend Lord Whitty just made a powerful contribution about the need to look at this in the context of housing policy more generally: the provision of a range of new accommodation and the range of tenancies that we have. To use the mechanism of housing benefit as the sole lever to try to deal with the problem seems fundamentally flawed.
There seems to be an assumption behind that approach that someone who finds themselves in a position of underoccupation, as defined, is somehow doing it to cheat the state, to grab more from housing benefit that they might be entitled to. The reasons that people end up in an underoccupying position are varied. It could be that the kids are leaving home to go to university; it could be that a member of the household has undertaken the instructions of the noble Lord, Lord Tebbit, and got on their bike to find a job somewhere else; there could have been a death in the family. All sorts of reasons may underpin why people find themselves underoccupied, and I am not sure that that is reflected in the provisions.
I must stop agreeing with the noble Lord, Lord Best, but I agree that underoccupation is more of an issue among elderly people. I remember people from the patch that I represented on the council. One elderly woman occupied alone the three-bedroom house that she had occupied since she started a family. That is where her memories were. She could not get up the stairs and used to sleep in the front room. That is not a satisfactory outcome to her life or, indeed, to the use of housing stock. Means of dealing with that, such as local authorities having a scheme whereby they can help people to move by dealing with the practical issues of carpets, curtains, utilities and so on, would relieve some of the risks and tensions associated with moving house.
Lord Freud
My Lords, this has been a very good debate. I am not saying I have welcomed anything anyone has said, but I am saying the quality of the debate has been very high. I thank noble Lords for the great expertise they have brought to these issues. In response to the request of my noble friend Lord Kirkwood and the noble Lord, Lord McKenzie, I shall try to answer on each of these amendments and justify the idea that we can group them and get the right answers through. I am grateful for the indulgence of Committee members in allowing some big groups to come through, which should help us, but I aim to answer all of these issues.
To go back to the essential core point, housing support is a critical element of universal credit. It will help people pay their housing costs and help prevent homelessness. It will recognise that people need support across a range of different tenure types whether they live in the private rented sector, the social sector or whether they are owner occupiers. However, to repeat the point I made earlier, it also needs to be affordable to the taxpayer. My noble friend Lord German made the point about the increases in pure cash terms—it is up from £11 billion to £22 billion in a decade, which is 40 per cent in real terms—and that rise was going to continue if we did nothing.
The noble Lord, Lord McKenzie, asked why is it this community that is taking the £2 billion saving we are looking at. I remind Committee Members that the way we are designing many of these particular housing reductions is not directed wholly or even mostly at tenants. Clearly, we are looking for landlords to take the strain in the private sector—I am on record as saying that—although we expect other responses in the social area which I have gone through.
Lord McKenzie of Luton
I quoted the figure of £2 billion. I thought that figure was for several years and related to these underoccupancy provisions. Is that right or is it a broader range?
Lord Freud
No, the figure of £2 billion applies to the total saving by the end of the period in 2015 of all the benefit changes, and the particular change here is £0.5 billion per annum on the social sector from 2013-14.
Tackling housing benefit expenditure is vital to our combined efforts to reduce the economic deficit. The measures within Clause 68 will help to deliver significant savings affecting housing benefit claims for those living in both the private and social rented sector. Clause 11 will allow us to carry these measures through into universal credit.
Starting with Amendment 36 from my noble friend Lord Kirkwood and the noble Lord, Lord Kennedy, I confess that it surprises me because it appears to call for a return to something akin to the local reference rent. This was a system that was difficult for claimants to understand, led to delays as individual rent officer determinations were sought, and it was expensive. It needed an army of rent officers to carry out these case-specific determinations. It is not a system that I would willingly go back to. This amendment would also maintain the status quo for housing benefit in the social rented sector, ignoring a property size in relation to the size of the household. As I have set out, we must take control of housing benefit expenditure across both sectors, but this amendment would do neither. In fact, it would increase costs.
I turn to my noble friend’s point on CPI. We will discuss this in more detail in a later group. The CPI uprating will apply across the spending review period, and if it becomes apparent that LHA rates and rents are moving out of step, they can be reconsidered at that point.
Amendments 38 and 79 would exclude anyone from this measure who is disabled and lives in adapted accommodation. Unlike Amendment 48 in the name of the noble Baroness, Lady Hollis, this exemption would apply regardless of the extent of the adaptations that have been made. It would also exempt anyone in accommodation who is “particularly suited” to the needs of that person. These are extremely broad categories. We have already heard in some detail the issues surrounding claimants living in adapted and specially suited accommodation. The terms of the exemption suggested in these amendments are simply too broad brush. However, as I said in relation to Amendment 48, I want to return to this matter once we have considered it further.
Amendments 43 and 83 also touch on similar issues to those discussed in relation to Amendment 48. They would exempt claimants where there is no suitable alternative accommodation, which is classified in the amendment as social rented housing that is also within the claimant’s locality. We cannot contemplate such a wide-ranging exemption. It would be costly to administer and would no doubt apply to those who would, in fact, have paid the shortfall regardless.
On Amendments 39 and 80, we estimate that around 200,000 claimants, where only they or their partner receive disability living allowance, will potentially be affected by the size criteria measure. However, this figure does not include other members of the household such as children and non-dependants. An exemption is simply not affordable and may well include many cases for whom an exemption would not be necessary, while missing out other hard cases. To provide a blanket exemption where claimants and partners receive DLA would lead to a reduction in savings of approximately between £130 million and £140 million in 2013-14, and this amendment goes further even than that.
Amendment 48C and the peculiarly titled Amendment 86ZZZA would exclude all households where there is a disabled child and again reduce the savings significantly and provide too broad an exemption. In response to the point made by my noble friend Lord German about exemptions for people who require an extra room as a result of a medical condition, we are looking at ways to potentially limit the impact of these changes in a way that is effective and affordable. The most appropriate course of action for the tenant and landlord in such cases will vary, depending on the individual circumstances of the claimant and his or her household. They may choose, for example, to apply for a discretionary housing payment.
As for the point raised by the noble Baroness, Lady Campbell, on fluctuating health conditions, local authorities can and do use discretionary housing payments for precisely that purpose. I can inform her that we have worked with the Department of Health on the extra room for a non-resident carer, which will cover that point in the guidance we issue to local authorities.
Amendments 40, 41 and 81 are relevant to foster carers. Within universal credit, our intention is to ignore any fostering income and therefore not to include any foster children within the assessment unit. To do otherwise, by treating the child as a family member and the fostering allowance as income, could result in the family being considerably worse off, and as such act as a deterrent to fostering.
Baroness Hollis of Heigham
My Lords, perhaps I may press the Minister on that key point. He has quoted a figure of £500 million for HB savings. The impact analysis that I think most of us were working off gave a figure of £700 million. If that figure is correct—it may have been overtaken by further refinement from the DWP—it would mean that, for less than half the cost of the savings, he would take some 80 per cent of those worst affected out of the equation. That seems to be very good value.
Lord Freud
My Lords, without us rambling through the papers, I think that the figure is £500 million, of which £300 million is a very substantial proportion.
The Deputy Speaker (Lord Haskel)
My Lords, a Division has been called in the House. The Committee stands adjourned for 10 minutes.
Lord Freud
My Lords, perhaps I may conclude on the point raised by the noble Baroness, Lady Hollis. The confusion is between the £0.5 billion that we start to save annually in 2013-14 and the £770 million figure that she quoted from the impact assessment. It represents two years of savings on a GB basis, which is appropriately discounted and deflated.
Baroness Hollis of Heigham
My Lords, it is nice of the Minister to give us those figures, but is his £300 million the amount set off against the £500 million, or is it set off against the £770 million?
Lord Freud
No, it is £300 million set against £500 million—so 60 per cent.
I have already talked about the behavioural responses. I move to the point raised by the noble Lord, Lord Rix, about the number of bedrooms, the size of the rooms and box rooms. Again, we discussed that issue briefly in the previous set of amendments when the noble Lord, Lord Foulkes, raised the window tax. It is the social landlord’s responsibility to specify the number of bedrooms in a property but, as I said, we are looking at this, including the size of the bedrooms, to explore whether it is an issue.
Amendment 35 of the noble Lord, Lord Rix, relates to support for mortgage interest payments and is connected with Schedule 4, concerning the payment of housing costs for pensioners. I understand only too well why noble Lords are seeking reassurance that assistance with eligible mortgage interest costs will continue to be provided for homeowners, including those with long-term disabilities. In fact, I met only yesterday representatives from Mencap to discuss these matters.
Approximately 430 claimants have purchased their properties through the shared ownership scheme known as HOLD—rather less than the 1,000 figure that has more generally been quoted. The Government want disabled people to continue to access suitably adapted homes, whether through a mortgage or housing benefit. The Homes and Communities Agency continues to support the provision of shared-ownership homes where this is a local priority, including shared-ownership homes under HOLD. The agency is holding ongoing discussions with lenders on the provision of mortgages for HOLD. Support for mortgage interest is intended to provide a reasonable level of help for homeowners but has never been intended to cover all of a person’s housing liabilities. As noble Lords can see from the draft regulations, help will continue for homeowners. So I see no need to set out in the Bill specific reference to mortgage interest payments. We propose to continue using the same standard mortgage interest rate for all claimants. As to Schedule 4, a housing credit element with broadly the same rules as housing benefit will be introduced into pension credit to ensure that low-income pensioners continue to receive help with their rent.
Regarding the point raised by the noble Lord, Lord Best, on providing incentives for pensioners to move, our approach to this issue will, over the long term, help to ensure that people are in suitably sized accommodation before they become pensioners. Our expectation is that the proportion of pensioners needing to downsize will in future be lower than it is now. As several noble Lords mentioned, the Localism Bill includes measures specifically aimed at helping pensioners to downsize and will help to increase mobility in the social rented sector for this group.
Baroness Hollis of Heigham
Could the Minister at some point, not necessarily today but in due course, set out the stats on the number of pensioners underoccupying and what his projection is of the time it will take for numbers to diminish?
Lord Freud
I would be happy to circulate the information to noble Lords.
On the social sector size criteria measure that we are introducing through Clause 68, we will use the time before its introduction in April 2013, as we are already doing, to explore fully the implications for claimants and landlords. We acknowledge that the impact will not be the same across all regions; we will work with stakeholders to look at those variations as we move towards implementation.
Let me repeat: I value these debates and hope that they continue on a constructive level as we move forward.
Baroness Wilkins
Could I just return to the issue of disabled people? I am delighted to hear that he is willing to think again about fostering, but I am very disappointed by his reaction in relation to disabled people and feel that he has failed to recognise their situation. He says that the amendments have been drawn too widely. Could I press him on what he would feel was acceptable?
Lord Freud
My Lords, I hope that I am indicating that we are looking very hard at what proposition we can bring forward later on in this process of considering this Bill to deal with that particular set of problems that noble Lords have raised. So I will have something to say later on in the process.
The Earl of Listowel
I am very grateful to the Minister for reassuring the Committee that he will think carefully about the treatment of foster carers. That is welcome. However, I have a strong concern about a number of issues in this area. I have two questions. I wonder if he could drop me a letter on this, if he cannot reply now. Those registered foster carers who may have one, two or possibly even three rooms vacant, who do not have foster children with them at the moment but are waiting for them, and because of that are not getting an allowance and are on benefit, are hit by that—it is a bad situation for them. So reassurance on their position would be good. I am grateful to him for his response with regard to those parents who have their children removed from them. I think he was saying that for a short period it would be acceptable to give those families where the child has been removed an exemption in certain circumstances. I feel very worried about those families, which are very dysfunctional by definition. To have one’s children taken away is a very serious situation, and to lose a child and then to have an extra room or two rooms and to be further hit—that does worry me. Reassurance on that point, what happens to them, would be welcome.
Lord Freud
I will repeat the two points. The first point is exactly the issue that we want to deal with and the one that the foster community is worried about—the voids area. That is something that we are aiming to address. My response to the second point was, and remains, that this is where we would expect discretionary housing payments to come into play. It is exactly the complex set of judgments that need to be made, and local authorities are best placed to make them.
Baroness Hollins
I apologise for this, but I think that the Minister said that the same mortgage rates would be applicable as for everybody else. From my understanding, in the example that I gave of Theo, the mortgage rates had changed from the previous preferential rates, leading to a gap in the costs of his housing that he cannot meet.
Lord Freud
I think that this is the same case where I spent time with the family, so I am reasonably familiar with it. There was never any preferential treatment within HOLD; it used the standard rates. What has happened is to some extent a bit of a breakdown in the financing market in this area, among other breakdowns, after the worst financial crisis that any of us has ever seen.
So we are looking at a dysfunctional mortgage market with huge deposits required. There was never any special provision here: they were using the standard provision. We pulled it down from a little over 6 per cent to, as the noble Lord correctly said, 3.63 per cent and, if we had used the formula pre-crisis, we would have gone down to a rate of 2.08 per cent, which would have left people in an even worse position. To some extent, by moving the way that we do this, we have been more generous than the previous formula, but we have not changed the goalposts in any way. The issue is whether the market revives naturally—I know that it is shut at the moment—or whether, frankly, we need to think again about what is the appropriate level of support and how it should be delivered.
Baroness Sherlock
May I press the Minister on one more point? I understood that his argument in response to the amendments up to Amendment 83 was that he could not accept such a broad exclusion because it would encompass people who would otherwise have paid the shortfall. That is probably the dead weight argument. I was in the Treasury. Dead weight is much loved as an argument by the Treasury and despised by pretty much everyone outside it. You can see that it makes perfect sense, if you are in the Treasury, to think, “You are already paying this, why on earth would I want to do it?”. If you are on the other end of the telescope, it looks rather different.
Does the Minister accept that the fact that a claimant may stay put and pay the difference does not necessarily mean that they can afford to pay it? That point was made by the noble Lord, Lord Kirkwood, and the noble Earl, Lord Listowel. Someone who can see no alternative suitable accommodation may stay put, pay the difference—or at least accept that they must pay the difference and get into debt, with all the consequences that has for the family. Does the Minister accept that point and, if so, how will he address it?
Lord Freud
My Lords, it was interesting that there was a range of responses to our survey. Different people will do different things depending on the circumstances. That is the point. That is the problem with all the broadly defined exemptions that we have discussed today, which we have explored in great detail in the department: none of them works to define eloquently and adequately the people whom we want to protect. We need other ways to do that. I know that people like to attack the Treasury on every conceivable opportunity—
Baroness Sherlock
The Treasury employed me for many years; I would do no such thing.
Lord Freud
It did not sound like that.
Some people will choose to pay £11 and £12 extra for an extra bedroom perfectly rationally and other people will make other responses; a wide range of response is likely. A lot of people would regard it as a bargain to spend that amount on an extra bedroom. As noble Lords will be aware, spending to get that extra accommodation in the outside world—whether through a mortgage or through renting—would cost a lot more.
Baroness Sherlock
Forgive me, in the interests of levity, I was not being clear enough. The people I am concerned about are not those who could afford it but declined to stay, or those who are staying put and are happy to pay the money. The Minister mentioned statistics earlier about the number of people who would move, downsize or stay put and pay the difference. I am concerned about the rump who remain, which I think is sizeable—perhaps he will remind us of the percentage. I tease him about dead weight only because that argument works only if the Government are willing to accept that the price is borne by those who are not capable of making the difference. I am trying to tease out exactly how big is that price, who is paying it and what price the Minister would regard as acceptable for people who are forced into debt in order to make it work for everyone else.
Lord Freud
My Lords, I said earlier that we are working on the detailed implementation of this. It would be premature to make judgments on that. We need to develop strategies to ensure that those problems do not arise.
Baroness Hollis of Heigham
In that case, can I ask the Minister to amplify his stats for us when he writes to us next? He has talked several times, over the few Committee days we have had, about a £60 million discretionary housing fund, and how it is going up threefold, and so on. I am not keeping a tight list, but I think we have now overspent that by approximately five times. Could he tell us—given that there are some 400 local authorities—even on a per capita basis, how it works out? On average an authority can only help 700 families, out of—for instance, in the Norwich situation—some 20,000-odd families that are in rented accommodation.
I believe that those people affected, who will not readily afford it, are probably more like 7,000 rather than 700. Could the Minister give us the assumptions, or the stats, behind that £60 million figure as to what this would mean in a typical local authority, per 1,000 rented homes, for a period of, say, six months, or what percentage of those families you could typically expect to support? So that, per 1,000, that £60 million would extend to 20 families for six months, or 50 families for six months. Then we can get some idea of how that money connects to all the various issues for which this will, apparently, be the solution.
Lord Freud
Yes. I always prefer to answer rather than write, but I think I will on this occasion go to paper. It may be that the noble Baroness prefers paper.
The Earl of Listowel
My Lords, I was grateful, as I said before, that the Minister is giving this issue of arrears careful consideration. I think it might be helpful to the Committee if he could provide some reassurance that by Report we will have considerably more detail on what the plight will be of those who face arrears under the new arrangement. Can he give any assurance on that point?
Lord Freud
By the time we get to this again, I will come back with that answer.
Lord Wigley
My Lords, I speak at the request of my noble friend Lord Rix, who has had to leave the Committee, because we have now been going for well over four hours. I think he anticipated that we would have finished before now, and he has had to go to a 7.30 pm engagement outside the House. He has asked me, as I have my name on the amendment that led this bank of amendments, if I could respond briefly.
In doing so, I will touch on three points. In reverse order, taking up the point made by the noble Baroness, Lady Hollis of Heigham, a moment ago, with regard to the cost implication of the discretionary payments that are to be made by local government, has an assurance been given by the devolved Administrations that they have the resources to be able to do this? We are dealing with a non-devolved subject but are looking to devolved authorities, from a devolved budget, to fund the counterbalancing money that is required. If that answer is not available now, perhaps there will be an opportunity at some later stage to deal with that. It is clearly a matter that will be of concern, not only to the devolved Administrations, but to local authorities in Wales and Scotland.
Lord Freud
I can answer the noble Lord pretty rapidly on that. This is not a devolved area, so the discretionary housing payments are not devolved.
Lord Wigley
Of course—that is the whole point. The housing benefit is not a devolved area, but local government money is, unless there is going to be payment made from Westminster sources—Whitehall sources—to the local authorities in Wales. From the indication I get, payments will be made directly to local authorities, or via the Assembly to local authorities. In which case, fair enough, if enough money is going to be there; but if it has to come from their general pools, then that is from a devolved budget and will cause them problems.
Lord Freud
All I can confirm is that, just as anywhere else in the country, in those Administrations, the money will go by formula to those local authorities, in the same way that it currently does.
Lord Wigley
I accept entirely, of course, that housing benefit is run by the local authorities as a non-devolved portfolio, coming under Whitehall. However, the general funds that they have, unless there is additional funding coming from Whitehall to those local authorities and bypassing the Assembly, it would otherwise come out of the Assembly budget. All I was asking was whether that had been agreed with either the Assembly, or in the case of Wales, the Welsh Local Government Association? The Minister might be able to confirm that.
Lord Freud
What I can confirm is that the DHPs go directly to the local authorities, not through the local Assemblies.
Lord Wigley
Therefore, will any additional resources for discretionary payments that will be made, in line with the numerous references to discretionary payments that we have heard over the past few days, go directly and be over and above the payments that will otherwise be made.
Lord Wigley
We can put a marker down on that clear answer, for which I am very grateful.
Secondly, on one of the banks of amendments that dealt with disability and tried to get exclusions for people in certain categories of disability, the Minister, if I recall rightly, said that it would cost far too much, possibly £180 million. If that is the cost of excluding disabled families from the provisions of the Bill, it is, equally, the additional cost being faced by disabled families as a consequence of the Bill. That is an enormous cost. If it is a large sum for the Treasury budget, how much larger a sum must it be for disabled people trying to find it from their own domestic budgets? That is something that I suspect we shall need to come back to for clarification on Report. I hope that will be possible. I do not expect the Minister to respond at this point.
My third point is in regard to Amendment 35 in my name and that of my friend, the noble Lord, Lord Rix, which concerns home ownership among people with long-term disabilities. The Minister mentioned that only 400 people were affected by this. I am sure he is not decrying the importance of the scheme for the 400 people that it has helped; every single one is important in its own right.
Lord Freud
My Lords, may I make that absolutely clear? There are 430 people currently on the HOLD scheme. The bulk of them have an arrangement with a mortgage provider, Kent Reliance, which means that they can continue to pay the required rate of 3.63 per cent. Therefore, only a handful of people on the HOLD scheme are affected by any change.
Lord Wigley
Yes indeed, those 430 may well be safeguarded but there is the question of whether other people, who might in the past have come on to that scheme, will not be able to do so in the future. More importantly, the Minister referred to having had a meeting yesterday with people from Mencap to discuss this. From having a brief word with the noble Lord, Lord Rix, before he left, I understand that the people at Mencap are hoping that the Minister will at some stage, if not today, come back with some provision that will cover the requirements of this important group of people who are being helped by the scheme. I do not know whether they misunderstood that or whether the Minister will look at it again before Report to see what can be done. However, I very much hope that he will take on board the serious points that have been made by the noble Baroness and others, including the noble Lord, Lord Rix, about this important group.
We have gone well beyond our time. I put it to noble Lords that we ought to consider whether this is the most sensible way of undertaking our responsibilities, when the Committee runs for more than four hours without a break, we have disabled colleagues here and there are disabled people who want to follow our proceedings. I beg leave to withdraw the amendment.
Lord De Mauley
My Lords, this may be a convenient moment for the Committee to adjourn until 2 pm on Thursday, 20 October.