16:56 - The House divided: - Ayes: 316 / Noes: 263 - Question accordingly agreed to.
The Minister of State, Department for Work and Pensions (Chris Grayling)
I beg to move, That this House disagrees with Lords amendment 3B, and Lords amendment 26B.
Mr Speaker
With this it will be convenient to discuss the following:
That this House does not insist on its amendment 19A, and agrees with Lords amendments 17B to 17D and 19B.
That this House agrees with Lords amendment 73BA.
Chris Grayling
If I may, I shall deal first with amendments 17B to 17D and 19B, on employment and support allowance time-limiting, and amendment 73BA, on child maintenance. The Government wish to accept these amendments.
Amendments 17B to 17D and 19B do not change the Government’s existing policy on the time-limiting of contributory ESA. The limit will remain at 365 days for those in the work-related activity group and will take effect from April 2012. I believe that the limit strikes an appropriate balance between the needs of sick and disabled people and the interests of taxpayers who contribute towards the cost. It will make a significant contribution to reducing the fiscal deficit, which I remind hon. Members once again is the most pressing priority facing the coalition Government. We estimate that the one-year time limit will reduce expenditure by £1 billion a year by 2014-15.
We have listened carefully over the course of the debate, however. The amendments would allow a future Government, if they could identify an appropriate funding source, to increase the length of the time limit by order rather than further primary legislation. We have considered that and decided that it is a sensible and appropriate use of an order-making power and we are happy to accept the amendments.
Amendment 73BA clarifies some of the powers introduced by the previous Government under the Child Maintenance and Other Payments Act 2008 and gives examples of the provisions that may be made under regulations. I should stress again that it does not imply any change to our proposed policies on charging. Specifically, I highlight the fact that we maintain our commitment to a maximum application charge of £20 and to collection charges within the ranges set out in the January 2011 Green Paper.
On Report in the Lords, we committed to undertake a review of the charging policy 30 months after the implementation of the powers, to understand their effect and impact. The amendment clarifies that if changes to our approach are required following that review, we will have the ability to make them. Although our core proposals on charging remain the same, the amendment ensures that in future—particularly following our review—we will be able to change the charging regime, with specific reference to apportionment and waivers, if we deem such changes to be necessary.
I shall deal now with housing, where I am afraid we do not agree with Lords amendments 3B and 26B. As you indicated, Mr Speaker, the amendments infringe the financial privileges of this House, and if they are rejected that will be the reason given to the House of Lords.
Let me first ensure that the House is clear about the financial implications of the amendments. We know about the big financial challenges we face. Since we last debated the Bill, Moody’s has placed the UK’s triple A credit rating on negative outlook and made it clear that the Government’s strategy is necessary to retain the credibility of our nation in the international financial arena. That is not a context in which we can relax public spending. We made it perfectly clear on 1 February, when we last considered Lords amendments, that the earlier amendments, which could cost around £300 million a year, were unaffordable. The Government’s response to amendments costing £100 million, as these new amendments would, is no different.
Mr Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab)
When the Minister considers financial implications, does he bear in mind the fact that the Government’s own calculations indicate that 66% of disabled people will bear the burden of an average loss of £13 a week? Is it any wonder that organisations such as Mencap are appalled that it takes the House of Lords to point out to us the unfairness of such proposed legislation?
Chris Grayling
The right hon. Gentleman needs to remember what the amendments are about. Large numbers of people in our community are under-housed and others are in temporary accommodation. We have formed the view that it is neither good value for the taxpayer nor right for those people that we pay for those in social housing to have spare rooms. That is the purpose of our amendments.
Sheila Gilmore (Edinburgh East) (Lab)
If the Minister is successful and people move from homes that they under-occupy and other people move in, and assuming that the same proportion of people are on housing benefit, there will be no financial saving. Which is his real argument?
Chris Grayling
The hon. Lady simply has not thought things through properly. At the moment, we are paying expensive temporary accommodation costs, partly because the previous Government—her own party—had such a lamentable record in office in building social housing. When Opposition Members make those claims, they should remember how poorly they performed in that regard.
Ann Coffey (Stockport) (Lab)
I seek clarification from the Minister. The new under-occupancy rule will only apply to working-age housing benefit claimants. To be of working age, claimants have to be under the qualifying age for pension credit, which will be 61 and a half in April 2013. Will the Minister clarify whether, on the introduction of the change to occupancy in 2013, a couple claiming housing benefit are protected from the change if one of them has reached pension credit qualifying age, or will both need to do so?
Chris Grayling
The approach we are taking across all our reforms is that if somebody in a household is of working age, we expect them to work. All our efforts and the support we are putting in place are designed to ensure that people work and that households benefit from an income from employment rather than otherwise.
As I said, the amendments would cost £100 million. They are not modest amendments, as suggested in the other place. In fact, Lord Best, who proposed them, believed that they might cost even more—£150 million a year. Either way, it would significantly reduce the estimated annual savings of £500 million. We simply do not have a blank cheque that will cover the costs of the amendments.
To give their lordships credit, there was at least some acknowledgement in the other place that £100 million is “serious money.” I am glad we can agree on that point; the amendments are certainly not modest. It is incumbent on us to do what we can to drive down the spiralling cost of housing benefit. Left unchecked, expenditure on housing benefit would reach £26 billion by 2014-15. The shadow Secretary of State is always complaining about the cost of housing benefit, yet he and his party have been consistently hostile to measures that bring the cost under control.
Mr Edward Timpson (Crewe and Nantwich) (Con)
Will my right hon. Friend confirm that foster carers will not be included in the new under-occupation rules because of the specific discretionary housing payment that will be made available to local authorities to compensate foster carers to ensure that they do not end up unable to continue their great work in our community?
Chris Grayling
I give my hon. Friend that assurance and pay tribute to him. I know that he has a deep knowledge of the sector. It is very important, but the approach that we have sought to take is that there should not be a one-size-fits-all solution. Where we can, we should localise and give discretion. There may be circumstances in which somebody is still a foster carer and has a property that is much too large even for those needs, but we want to make sure that we provide proper protection for those who carry out such a vital role in our society. We are making substantial amounts of money available to local authorities so that they have the discretion to protect the people who are performing that important role.
Charlie Elphicke (Dover) (Con)
One concern that I have in my constituency is that many people live in overcrowded accommodation and have been waiting to get accommodation with the space that they need. Across the country there are 250,000 people in that position. Meanwhile there are empty-nesters rattling round in houses with spare rooms. Surely we should have an incentive for people with excess housing space to move out and enable overcrowded families to have the space that they need.
Mr Speaker
Order. Before the Minister of State responds, may I remind the House that we have only an hour for Lords amendments? After the Minister, there is another Front-Bench speech. There are Back Benchers who wish to speak, so I exhort colleagues who are intervening to remember that they should do so briefly.
Chris Grayling
Indeed, Mr Speaker, and I shall try to be as rapid as I can for that reason.
It would be all too easy to bow to pressure to backtrack on these reforms, but we will not do that for precisely the reasons set out by my hon. Friend the Member for Dover (Charlie Elphicke). There is a real problem of people in temporary accommodation, and we also have about a million spare rooms being funded by housing benefit. We must sort out the situation and solve the problem to which he rightly refers. These reforms are designed to do that.
Simon Hughes (Bermondsey and Old Southwark) (LD)
I am grateful to Ministers for their engagement on this difficult but important issue. With reference to families who cannot find suitable alternative smaller accommodation but are in the categories that the Government have wisely exempted from the benefit cap, will the Minister explain to me why they should be penalised and where they will find the money to meet the extra bill—potentially £750 a year?
Chris Grayling
I know my right hon. Friend has expressed concerns about the policy. Let me say to him that we will carry out detailed reviews of it, as I know he wishes us to do. We will look at the impact of the policy. We have a year to work with the families involved, and we are providing substantial sums. An additional £30 million was announced as part of the debate on these measures, as well as the substantial amounts available for discretionary housing payments. It is our expectation that in most cases what we will see over the next 12 months is a change of circumstances that addresses many of his concerns, but there will be discretionary funds available to local authorities so that in his constituency and others they can deal with the kind of situation that he has described.
Simon Hughes
If the Bill goes through, but before regulations are laid, will the Minister work with colleagues and local government to make sure that the people affected have certainty? The problem with discretionary payments is the uncertainty, and people who cannot work have enough uncertainty already.
Chris Grayling
Let me give my right hon. Friend an assurance that we will work closely with him on the process of reviewing the impacts and over the coming months we will continue our dialogue with him, which has been very helpful and constructive, to make sure that we make him aware of the approach that we are taking and that we seek his input in that approach. I give him that assurance.
Mr Alan Reid (Argyll and Bute) (LD)
I am pleased to hear my right hon. Friend say that there will be discretionary housing payments to take into account particular circumstances. I draw his attention to the particular circumstances of islands and very remote communities where, because of the nature of the housing stock, there may be no alternative for people to move to. When funds are allocated to local authorities, will the position of islands and remote communities be taken into account?
Chris Grayling
We will certainly look very carefully at that. I give the hon. Gentleman that assurance, and again we will talk to him in detail about those issues.
This latest amendment looks to protect certain groups from the size criteria measure where they have one spare bedroom and no suitable offer of alternative accommodation has been made. However, I remind hon. Members that we have already committed to providing extra help—£30 million—to some of those groups, particularly foster carers and disabled people living in adapted accommodation. That money can help around 40,000 claimants. We are not ignoring the fact that some people will find it hard and have sought to put safeguards in place. Our aspiration is to protect the most vulnerable in society while also dealing with the broader challenge of under-occupation. There are a number of responses that individual households can choose to make to this measure.
Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)
The Minister has sketched out for the House a number of important concessions for groups that will be adversely affected by this policy. When does he expect guidance on how discretionary housing payments will actually work to be available for review by Members of this House?
Chris Grayling
Of course, many of the local decisions will be taken by local authorities, but we will provide information to the House as quickly as we can. We are aware that we have 12 months before the measure is in place and so will work quickly. Indeed, we are already working with local authorities to plan ahead and will be happy to make information available to the House in a timely way as it becomes available.
It is all too easy to criticise this measure and propose costly amendments, but I think that that serves to highlight the real challenges we face. What we propose is fair for the taxpayer and for tenants in the private sector who receive housing benefit based on the same size criteria. There is no plausible fairer or affordable alternative.
Nick de Bois (Enfield North) (Con)
Will the Minister help me to put this in context? Is he aware that there are high earners living in social housing with excess bedrooms who really should make way for other people who need the space?
Chris Grayling
As we know, there are even people close to this place who still occupy social housing. It is our view that, where possible, social housing should be targeted at those on the lowest incomes, those who face the greatest challenges and those who are perhaps struggling in temporary accommodation. I think that those who are living in accommodation that is out of kilter with their financial circumstances might think about their personal circumstances, as was discussed when this matter was before the House previously.
The average weekly reduction will be £14. Nearly 80% of those affected are under-occupying their accommodation by just one bedroom and so are likely to see an average weekly reduction of £12. By comparison, for private sector tenants the average cost of an extra room is about £20 a week, based on local housing allowance rates. What we are doing is introducing fairness and consistency of treatment for social sector and private sector tenants alike.
Dr William McCrea (South Antrim) (DUP)
Can the Minister assure me that he and his Department are working closely with the devolved Administrations, especially the Minister for Social Development in Northern Ireland, on his proposed reforms?
Chris Grayling
I am happy to give the hon. Gentleman that assurance. My noble Friend Lord Freud, who has direct responsibility for housing benefit matters in the Department, is also responsible for liaising with the devolved Assemblies and so is having those kinds of discussions all the time.
Stewart Hosie (Dundee East) (SNP)
In his discussions, will the Minister make it clear that the Scottish Government have pointed out that some 70,000 families will be affected by this proposal? There was a huge imbalance between the 95,000 properties that are under-occupied and the 26,000 that are over-occupied, and the cost to people in Scotland and the Scottish economy will be around £54 billion a year. That does not seem to make sense, particularly when he could not answer the point made by the hon. Member for Edinburgh East (Sheila Gilmore), which is that if his policy works there will be no under-occupancy to penalise.
Chris Grayling
I suggest that the hon. Gentleman check his facts. The total cost of housing benefit is £26 billion a year, so this cannot cost the Scottish economy £54 billion a year.
Our Department and local authorities have a good track record of delivering housing benefit reform. I am confident that these changes will be communicated and delivered successfully in the same way the local housing allowance reforms were delivered last year. We will work hard to ensure that there is a smooth transition in order to address the challenges and protect the most vulnerable through discretionary payments.
Mr Slaughter
As always, the hon. Gentleman is right on this issue.
The point has been made by those on my Front Bench many times that we are talking about people’s homes. This proposal is cynical not only because it runs completely in the face of Government policy in every other area, which is to reduce affordability and the quantum of available social housing, but because it is about persecuting people in social tenancies and making them feel that their home is no longer their own. For that reason above all, I urge the House to support the Labour Front Bench in supporting the Lords amendment.
Chris Grayling
I will probably not be able to cover all the questions that have been raised, but I shall pick out some of the key points.
The right hon. Member for Birkenhead (Mr Field) made a passionate defence of the spare room, referring back to the days of Macmillan and to the principles of the welfare state. I know that he is often a champion of welfare reform, and I listen carefully to what he says, but I find it difficult to justify maintaining 1 million spare rooms in the social rented sector when large numbers of families are living in temporary accommodation and in accommodation that is too small for them. I do not believe that the spare room is a luxury that the social rented sector can afford at the expense of children living in temporary rented accommodation. Fundamentally, that is what this change is about.
Chris Grayling
As I keep saying, that is not the case. At the moment, local authorities up and down the country are paying out large amounts of money; the right hon. Gentleman should talk to his own local authority about the challenges and costs of providing temporary accommodation. We depend so heavily on temporary accommodation partly because of the failings of the previous Government, going back 10 or 15 years, in the construction of social rented housing. I remember looking at the figures in the early part of the last decade. Had the Blair Government continued to build social housing at the same rate as the Major Government, we would have seen something like 300,000 more families in social rented accommodation. The fact is, however, that they did not. This was not a priority for them when they took office in 1997, and they cut back on construction. Today, we are living in extraordinarily difficult times, financially, and we are dealing with the consequences of the decisions that were made 15 years ago.
Mr Field
We are not interested in the Blair Government or the Brown Government; the electorate decided that they should come to an end. We are interested in what this Government are doing. Does the Minister not accept that if people followed his advice and moved into the private sector, far from saving the amount spent on housing benefit, such a move would actually increase it?
Chris Grayling
I simply do not accept that. The right hon. Gentleman is making assumptions about people’s behaviour and about the cost of temporary accommodation. We as a nation are housing in extremely expensive temporary accommodation large numbers of people who can and should be housed properly. At the same time, we are supporting 1 million empty bedrooms in the social rented sector. My colleagues and I believe that we simply cannot afford to do that at this moment in time. This is not the world of 15 years ago. We have come into government with empty coffers, as the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) always reminds us. We are having to take tough decisions, some of which we might wish that we did not have to take, and we are trying to take them in as fair a way as possible.
My hon. Friend the Member for Eastbourne (Stephen Lloyd) asked about foster carers. The foster carers of this nation are to be enormously admired for the work that they do, and I appreciate that this is a sensitive issue. In putting in place discretionary funding, we have focused specifically on those people. On the status of a foster child, the approach that we are taking is not to treat foster children as members of the foster carer’s household in the calculation of the appropriate amount of housing benefit. That is because we are treating them in a different way. It is consistent with the current treatment of foster children in housing benefit assessments for those living in the private rented sector, but we disregard the whole of the foster carer allowance that is given to the foster parents when assessing eligibility for all income-related benefits. That leaves the majority of households who foster substantially better off, so the payment is made through the foster care support system in order to ensure that the family has sufficient resource to make money available for support to cover the costs of those children.
The whole point of making discretionary money available is, as my hon. Friend the Member for Crewe and Nantwich (Mr Timpson) said, that there are of course situations where there is a gap in a foster child’s presence in a household. When the money is not coming in, we need to use discretionary funding to ensure that the family is appropriately and properly supported. We do not want to see foster carers forced out for the very good work they do; it is really important that we provide them with support.
In the last few seconds available to me, let me say again that a spare bedroom is a valuable asset. Taxpayers’ money is already being used to provide accommodation at social sector rents, averaging £79 a week in England compared with £160 in the private rented sector. Asking the taxpayer to find a further half a billion pounds to enable—