Welfare Reform Bill

Baroness Tyler of Enfield Excerpts

Monday 21st November 2011 Grand Committee

[Baroness Tyler of Enfield]

My Lords, I should like to explain why I decided to add my name to the excellent amendments that have just been put forward by the right reverend Prelate the Bishop of Ripon and Leeds. I, too, was indebted to the work of the Children’s Society, which did an excellent analysis in this area. I understand the rationale for a benefit cap. I am not trying to say that I am against it; I understand the arguments about promoting fairness between those in work and those receiving benefits, and indeed the need to reduce the cost of the rapidly growing benefits bill as part of the overall deficit reduction strategy. My concern, though, as I looked at the numbers, at who would be affected and at the types of families that would be affected, was the implications for some of the most vulnerable families, particularly families with children. I shall say a few more words about that.

I was very taken by the analysis of the Children’s Society that showed that children would be disproportionately affected by how the benefit cap is currently constructed. While it is estimated that some 50,000 households will have their benefits reduced at the moment by this policy, it has also been estimated that over 200,000 children will be affected and up to 80,000 of those could be made homeless.

The composition of the households that are likely to be affected is interesting. The figures are one-third couples, two-thirds single women—generally single mothers—and about half will also be disabled. Indeed, 60 per cent of the households likely to be affected live in London, where housing is more expensive, particularly people living in private rented accommodation. Various ethnic groups will also be particularly affected, when they have larger families.

The first consequences of the benefit cap, unless it is possible to look at constructing it in a different way—perhaps using one of the approaches suggested in these excellent amendments—will be families having to move very abruptly to cheaper areas. This risks children moving school in the middle of a year, thereby disrupting their education and their social networks. It also risks families splitting up, and I shall come back to that point. It could have adverse consequences on kinship carers—family and friends—which is why in the next grouping I am moving an amendment on that point. I also feel that families who will be able to continue to pay the rent will have less money left for other essentials such as food and clothes, which will therefore contribute to child poverty. For families who are not able to pay the rent, are evicted and become homeless, this will be a parlous situation. Children are a priority group for council housing so this is likely to lead to additional pressure on temporary accommodation costs, adding to the cost pressures on local authority budgets. We have heard quite a bit about this in recent months.

There is then a very real danger, which has had virtually no attention, that children at risk will simply disappear from view. This raises real child protection and safeguarding concerns for me. We all know the very tragic stories of children who have disappeared from view and what happens to them in the very worst circumstances. We must ensure that the benefit cap does not, however inadvertently, have that consequence.

Then there is the reduction in what I call mixed communities, as poorer families are forced to move out of an expensive area. As I said earlier, this is particularly the case in London. Not only will it create very undesirable ghettoisation but there will be pressure on public services in ways that different bits of different boroughs will find difficult to deal with. For example, the concentration of workless households in some areas has significant potential implications for a wide range of local authority services. Boroughs that have an inward migration of households are likely to face severely increased service pressures such as demand for school places, the impact of unemployment, poverty and poor housing conditions, whereas in contrast other boroughs will experience reduced demand for such services but will themselves face challenges and costs in adapting very quickly to these different demands.

The point that I should like to finish on, which I feel particularly passionate about—perhaps because I am chief executive of the country’s largest relationships support organisation Relate, which is a declared interest—is the inherent couple penalty currently built into the benefit cap. This has had very little attention so far, but it will affect couples substantially more than lone parents. Indeed, it has been suggested by experts in the field that the cap will introduce one of the most substantial couple penalties ever seen in the benefits system, so it could have the perverse consequence of breaking up families as well as deterring people from entering new relationships and forming new households. Surely this couple penalty is completely at odds with the Government’s, and indeed the Prime Minister’s, very clear stance on wishing to support strong and stable family relationships. I am sure that this is an unintended consequence and has not been thought through, but we need to look at this.

Finally, the impact would be particularly keen where two lone parents decide to move in together, particularly if they both had children from the previous relationship. Such couples could then find that they would be far worse off by moving in and forming one household rather than living as two separate households. I will not detain the Committee’s time any longer, but I just wanted to explain why I feel that having some in-depth discussion of an alternative way of constructing the benefit cap is so vital.

[Lord McKenzie of Luton]

My Lords, I think that the noble Lord, Lord Best, wishes to speak.

--- Later in debate ---

[Lord Best]

My Lords, I am speaking to Amendments 99AA, 99AB and 99D. We now return to housing matters. I have already made the point that it is high housing costs that so often will push families over the cap. High housing costs do not of course equate to housing quality. A £350-a-week two-bedroom flat in outer London can be to far lower standards than an £85-a-week three-bedroom council house with a garden in the north-east, yet the outer London family in Newham has only £150 left within the £500 cap after paying their rent while the well housed family in the north-east has £415 left to meet other needs. I have argued for the housing cost element in the benefits received to be taken out of the equation to create greater fairness. That change would render several of my amendments in this group redundant, but I turn to them none the less.

Amendment 99A calls for a period of grace for those affected by the new cap during which the claimant would remain entitled to full benefits. Only after this period—my amendment suggests 26 weeks—would the total benefit cap be applied. Without this concession, many families in private rented accommodation in the south of England will see the benefits for their housing costs cut, forcing them to look immediately for alternative housing elsewhere. Current housing benefit regulations allow for a 13-week period of grace from restrictions on the rent that they have been paying independently up to that point, so the claimant who could afford to pay the rent until they lost their job will get that rent covered in full for 13 weeks even if it breaches the maximum levels of local housing allowance. A longer period is allowed for households that have suffered bereavement. For them there is a 52-week period of grace. It seems entirely right that a proper safety net should be available to a family that faces a sudden change in circumstance to give them a chance to get back on their feet.

It is generally agreed that an important function of the benefits system is to provide such a full safety net for those suddenly hit by redundancy or relationship breakdown. If, from the very day that such a drastic change of circumstances has struck, the family has a substantial shortfall to find between their benefit for housing costs and the rent that they must pay, then a major setback becomes a real crisis. How much better to give the household some weeks to secure a new job, or indeed to move home without having to present themselves as homeless. How much more cost-effective to give people the opportunity to get back into work rather than having to move the family to another area where rents are lower and jobs likely to be scarcer, all the while accumulating rent arrears and seeing the chances of a settled life with a proper job taken from them.

If they are going to have to move to a cheaper part of the country, at least they must have time to make all those arrangements and, hopefully, secure employment in the new place. We all know that the cap is intended to reinforce the message that work pays and a life on benefits is not sustainable, but it will affect newly unemployed households that have a strong desire to work but have lost their jobs because of factors outside their control. Rather than penalise people who are doing all they can to make a swift return to employment, the arrangements should see people through a difficult period so that they can re-establish themselves for the long term.

Where relationship breakdown and the loss or desertion of the main breadwinner is the trigger for the benefit entitlement that is now to be capped—the DWP’s impact assessment shows that more than half the households affected by the cap are likely to be headed by lone parents—a precipitous application of the new limit seems likely to lead simply to homelessness. This compounds the harm and distress experienced by the children. Surely it makes more sense to allow those lone parents to look for a suitable job following separation, make arrangements for childcare—so often relying on grandparents, who themselves will need to make new arrangements—and get back on their feet in a sensible way, and to ensure that for the children the loss of a parent is not followed by the loss of a home.

At the same time, a breathing space allows those responsible for paying benefits to untangle the complexities, calculate entitlements in relation to tax credits and other exemptions and handle the administration. With local authorities continuing to look after housing benefit during the interim period before the universal credit arrives—at least six months—there is already enough opportunity for delay in handling these claims. The period of grace would help those paying the benefits as well as those receiving them. I am confident that the Minister will be able to respond positively on this one, as it seems in no one’s interests to deny families the breathing space in receiving the benefits that sees them through a bad patch, rather than forcing themselves into a crisis—into homelessness and, in all likelihood, into long-term worklessness.

My second amendment in this group, Amendment 99AB, seeks to exempt homeless households in temporary accommodation from the overall benefit cap. Again, this would be redundant if my earlier amendment to exempt all housing benefit from the cap was accepted. It is therefore a fallback amendment. It seems anomalous for those placed by their local authority in temporary accommodation, quite often outside their own borough and already in the cheapest neighbourhoods, to be penalised for paying too much for their housing. Such households have no choice over the accommodation that they occupy and therefore cannot seek to reduce their housing costs or cut their cloth to suit their means. Local authorities are already restricted in their choice of where they can put those deemed to be homeless by restrictions on the housing benefit payable for temporary accommodation. The housing benefit subsidy will not cover more than the local housing allowance, less 10 per cent, using the previous marker of the 50th percentile. Councils then charge an administrative fee of £40 a week in London or £60 elsewhere, which is added to the household’s housing benefit claim. The total rent payable in relation to the homeless household will be higher for temporary accommodation of this kind and therefore, alongside the family’s ordinary benefits, is more likely to take them over the proposed total housing benefit cap.

An additional complication is that at present the Government’s Homelessness Code of Guidance for Local Authorities prevents councils from arguing that a homeless household should use other benefits to top up the payment for their rent. This is an understandable restriction, since the state believes that the income of families for their subsistence living should not be reduced below a minimum level. This means, perfectly reasonably, that councils securing accommodation in the private rented sector for workless homeless families cannot turn to the families themselves to meet any part of the rental shortfall caused by the extra cap.

Already inner London authorities such as Westminster City Council are exporting homeless households to outer London boroughs. They will have to work within tougher constraints in future, but it is hard to see the sense of placing an overall benefit cap that reduces the benefit for housing costs for these homeless families. They are already being moved away from support networks—friends, grandparents et cetera—and penalising the family by cutting their income to the point when they cannot afford the accommodation to which they have been sent would seem to place both them and the council that sent them in an impossible position.

Is the idea that the local authority, having accepted responsibility for the homeless household, will be expected to support the family financially to stay in the temporary accommodation to which they have been sent? While such an arrangement would enable the family to remain there, the extra costs falling on the local authority would seem a very unfair transfer from the DWP to local councils. Or is the intention that the local authority must make arrangements to ship homeless families still further away, with all the logistical problems that implies?

Wherever families are sent, the costs of temporary accommodation are going to be high in relation to mainstream private renting and considerably more than social housing rents. Those placed in bed and breakfast accommodation cost an average of £325 per week back in 2008-09 across the whole of England, so moving people long distances may not achieve very great savings in these particular cases. It will certainly make it more difficult for people to find work in areas where they do not have local knowledge and contacts. The move is bound to disrupt children’s education; Shelter has found that 43 per cent of parents in temporary accommodation said that their children had missed some school and one in 10 had children who had lost out in a school place entirely. Moreover, because the maximum level does not rise according to the number of children in the family, as we have heard so clearly today, it is not clear that there is anywhere in the country to which the local authority could send a homeless family if it comprised several children. I know that the Government are planning changes to temporary accommodation funding for 2013. I hope that this presents an opportunity to overcome the incompatibility between the high cost of procuring temporary accommodation and the new overall benefit cap. Perhaps the Minister could reassure us of the position on that.

Amendment 99D in my name seeks to exempt people living in supported or sheltered housing from the extra benefit cap. This seems a fairly obvious exclusion when one thinks about it. Specialist housing for individuals and couples with support needs, usually provided by housing associations or charities, is clearly much more expensive than plain housing with no extras. Service charges will push up the total that is eligible for housing benefit. However, this housing has been created specifically to help those with particular needs in a cost-effective way. If people had to leave, it is improbable that they could be accommodated more cheaply elsewhere. No purpose would be served by imposing a cap that forced out vulnerable people who would have to be rehoused immediately at higher cost somewhere else.

This change seems an essential measure. For example, it would cover couples in sheltered housing where one person is below pension age, even if the other is well above it. It would also cover those younger people who are not eligible for disability benefits of any kind but who have experienced a range of traumas and vulnerabilities and who are being helped to seek training or employment, but who are not yet work-ready and need the continuing help of specialist supported housing for a little while longer. Once again, this small amendment would become redundant if the overarching principle was accepted that housing costs, which vary considerably from one household to another, should be taken out of the calculation of the cap.

I conclude where I began: the benefit cap is very often about cutting support for housing costs. However, housing benefit and local housing allowance have already been the subjects of serious reductions, and the imposition of the additional total benefit cap seems likely to have grave consequences. Removal of the housing component would address a good number of the unforeseen circumstances and represent a triumph of good sense. I look forward to the Minister’s response to my amendments.

[Baroness Tyler of Enfield]

My Lords, I add my support to the two amendments in this group to which I have added my name. I shall speak to Amendment 99AAA, which stands in my name, on the issue of kinship carers.

Amendment 99ZB, already moved very cogently by the right reverend Prelate, would remove child benefit from the calculation of the cap. There is much that I should like to say on this but in her recent contribution the noble Baroness, Lady Lister of Burtersett, made a very powerful case about the unfairness of including child benefit in the calculation of the cap. Frankly, there is little that I can add other than to say that if the Government were to accede to this amendment, there would be not just huge applause but real consensus around this table that children should be protected, whatever happens to adults. Whatever is thought—and probably not shared—about the perceived shortcomings of adults, children should always be protected.

Amendment 99C deals with the exemptions of particular groups from the benefit cap. This is the subject of Amendment 99AAA in my name regarding kinship carers. I will be very brief but I want to say a few words about why kinship carers are so important. A kinship carer might, for example, be an uncle, aunt or grandparent who takes in children from other members of the family to avoid that child going into council care, with all the trauma and expense to the state that that creates. The purpose of this amendment, which is essentially a probing amendment, is to see whether the Government indeed intend to exempt family and friend carers from the cap. The architecture is already there; Clause 93(4) provides for the introduction of regulations to make exemptions to the cap, and the amendment would include family and friends carers among those exemptions.