Benefit Cap (Housing Benefit and Universal Credit) (Amendment) Regulations 2016

Debate between Lord Best and Baroness Lister of Burtersett

Tuesday 8th November 2016 Lords Chamber

[Baroness Lister of Burtersett (Lab)]

My Lords, I thank the noble Lord, Lord Kirkwood of Kirkhope, who is in practice my noble friend on these issues, for praying against the benefit cap regulations. The first-year review of the cap unsurprisingly found that caring responsibilities, especially for young children, represented one of the main barriers facing capped families looking for work. According to the equality analysis, 16% of existing capped households—more than 3,000—contain a child aged under one. Of these, more than 2,000 are headed by a lone parent and the great majority of those are women. Yet even under the current punitive regime this group is not expected to seek work when their youngest child is so young, so what is the justification for including them in the cap? Surely, on the logic of the High Court judgment that led to the welcome exclusion of carers in these regulations, as we have heard, those caring for infants should also be excluded. The equality analysis indicates that the number of households containing a child aged under one is now of course likely to increase. Can the Minister give an estimate of how great this increase is likely to be?

The new cap will affect a much wider group of families over a wider geographical area. In my own region of the east Midlands, the number of households affected is expected to increase from 800 to 5,000—a rise from 4% to 11% of those affected nationally. In order to avoid the risk of the arbitrary effects to which the noble Lord, Lord Kirkwood, referred, the IFS suggests:

“It would be sensible for the government to set out a clear vision of which families it thinks receive excessive amounts of benefits and why”.

I look forward to the Minister enlightening us.

It still beats me how, as the Government claim, it can be in the best interests of these children for them to be driven further into poverty in the name of some theoretical future life chances, especially when the earlier IFS evaluation showed that only a tiny fraction of those affected had moved into paid work. Its more recent analysis suggests that it is not likely to be that different now. Moreover, there is evidence to indicate that cutting benefits can be counterproductive because impoverishment reduces job-seeking capacities. If all one’s energy has to go into getting by, that does not leave much over for presenting oneself as a suitable job applicant to employers.

As I cited during the passage of the Bill, according to last year’s Supreme Court judgment the department is misinterpreting the best interests requirement when it argues on the basis of the theoretical best interests of the generality of children rather than the actual best interests of children whose parents’ income is driven below what Parliament has deemed necessary to meet their needs. I very much concur with what the noble Lord, Lord Kirkwood, said about the basic principle of this cap, which I am opposed to.

Both the UN Committee on Economic, Social and Cultural Rights and the UN Committee on the Rights of the Child have recently expressed deep concern about the impact of the reductions in the cap. This is also referred to in the report just published by the Committee on the Rights of Persons with Disabilities. The fears of these UN committees are likely to be borne out given the recent warnings of, for example, the Chartered Institute of Housing. It is quite clear from the revised impact assessment that children are still disproportionately affected. In his Statement on the recent UNCRC concluding observations, the Minister for Vulnerable Children and Families called on government colleagues to reflect on the committee’s recommendations,

“for example, by reflecting the voice of the child fully in the design and implementation of policy”.—[Official Report, Commons, 17/10/16; col. 23WS.]

There is no evidence of the voice of the child here.

Despite being pressed a number of times during the passage of the Bill, there is also still no mention in the revised impact assessment of the application of the famous family test. The best that we got during the Bill was a letter from the Minister, which turned up in my junk email folder, assuring us:

“The Government has fully considered the family test criteria as an integral part of the policy development process”.

This is not how the DWP advises other government departments to present the outcome of the application of the family test. It simply is not good enough. Perhaps the Minister prefers not to spell out the impact on families of a policy that the impact assessment shows will disproportionately hit children and lone mothers.

Returning specifically to the impact on children’s rights, I draw attention here to the Equality and Human Rights Commission’s note on priority issues for implementing the concluding observations of the UNCRC. It would,

“highlight, for an urgent response, the recommendation of the UN CRC for the UK to ‘[c]onduct a comprehensive assessment of the cumulative impact of the full range of social security and tax credit reforms introduced between 2010 and 2016 on children’, and to revise the reforms where necessary to ensure the best interests of the child are”—

I stress are—“a primary consideration”. I would welcome the Minister’s response.

[Lord Best (CB)]

My Lords, on the face of it withdrawing help from very poor people, which is the effect of lowering the overall benefit cap, seems extremely harsh. It has two justifications, as I understand it, in addition to the obvious aim of saving money and reducing the national deficit. First, it is hoped that it will fiercely encourage those affected to seek out a job, since that would exempt them from the constraints of the cap. Secondly, the effect of the cap reducing support in housing benefit could be to persuade landlords to reduce rents. It seems that neither of these hoped-for outcomes will be very successful.

On the jobs front, the previous imposition of a benefits cap seems to have pushed less than a quarter of those affected into a job, leaving the great majority to take the hit in a straightforward reduction of their standard of living. The noble Lord, Lord Kirkwood, and the noble Baroness, Lady Lister, have spelled out the obstacles to the new measure getting people into work.

On the housing side, could the lowering of the cap achieve savings to the Government without hardship to those whose benefit is cut by coercing private landlords to trim their rents? Landlords who concentrate on tenants who need housing benefit would, it is argued, have to settle for a lower rent if tenants cannot pay, otherwise they would be faced with an empty property.

Of course I understand that the Department for Work and Pensions, propelled by the pressure of the Treasury, wants to reduce the housing benefit bill which, frustratingly, keeps rising as rents rise, but such is the scarcity of inexpensive homes to rent in London, and increasingly throughout the country, that private landlords do not cut rents when housing benefit tenants are given less to spend on rent. Instead, landlords simply stop letting their properties to people in receipt of housing benefit. More than three-quarters of private landlords will not consider housing anyone in receipt of HB, and those who are already letting to such tenants are increasingly unlikely to renew assured shorthold tenancies when they conclude after six months or a year.

The new cap is estimated by the Chartered Institute of Housing to hit 116,000 families containing 319,000 children. It comes on top of the local housing allowance caps and freezes, which are biting already. Although the impact of the new measure is greatest in London, despite the higher level of the cap there, all areas are affected. IFS figures show that families with three children face the most severe cuts. Half of them are facing a gap between their housing benefit and their rent of more than £100 per week. No private landlord is going to reduce rents by anything approaching that level.

So, in housing terms, the most likely impact of the new measure is the gradual elimination of privately rented accommodation for households which, for a host of reasons, are not in employment. Although tenants may try to make up the shortfall between their housing benefit and their rent by drawing on loans, help from friends and using up resources provided for food, heating et cetera, this is untenable for a sustained period. Debts and arrears are highly likely, and private landlords can see this coming. It is safer and more profitable to let to tenants who need no HB support.

What follows is likely to be an increase in homelessness. Housing associations and councils cannot take in all those rejected by the private rented sector. I know the Minister has done sterling work in extracting funding from the Treasury for discretionary housing payments to offset the impact of earlier benefit cuts. His efforts have reduced the deficit-cutting savings for the Government, but they are not a stable way to fend off homelessness in the face of continuing benefit cuts.

I will soon have the honour of piloting the Homelessness Reduction Bill through your Lordships’ House if and when it completes its stages in the other place. It will be a really helpful measure to prevent homelessness and provide more relief for those who face homelessness, and I am delighted that the Government are supporting it. However, this legislation, if it completes its stages in the other place and meets with approval in your Lordships’ House, cannot swiftly turn the tide and conjure up more rented homes within the reach of those who receive housing benefit. Market forces dictate that, if housing benefit does not cover the rent, private landlords will simply not let to these households.

I agree with the noble Lord, Lord Kirkwood of Kirkhope, that additional support to help those hit by the latest cap get a job is definitely needed before inflicting upon them a very significant cut in their income. Locating and assisting those affected in the private rented sector may not be easy, but several thousand council and housing association tenants are also affected. Councils which focus on these tenants are to be commended. Housing associations trying to help tenants with skills training need to be informed by their local councils of which tenants will be affected by the new benefit cap. They can then target support with financial advice and training on those people. The National Housing Federation points out that not all councils are sharing these data with their local housing associations. Support from the Minister in making sure this data-sharing happens would be very valuable.

Immigration Act 2014 (Commencement No. 6) Order 2016

Debate between Lord Best and Baroness Lister of Burtersett

Wednesday 24th February 2016 Lords Chamber

[Lord Best (CB)]

My Lords, I declare my interest as joint chair of the right-to-rent private landlords consultative panel at the Home Office. I jointly chair this panel with the Minister for Immigration, James Brokenshire. We have been meeting to discuss the right-to-rent measure every month or two since September 2014, with sub-groups meeting between the main panel meetings.

I was very critical of the right-to-rent proposals in your Lordships’ House before they became part of the Immigration Act 2014. I tabled nine amendments, all relating to the practicalities of requiring landlords to check the immigration status of their tenants. The House received a number of reassurances from the then Minister, the noble Lord, Lord Taylor of Holbeach, for which I was grateful, including arrangements for a pilot scheme in the West Midlands.

The panel, which continues to meet, includes representatives of landlords, tenants, property agents, all the relevant local authorities, three government departments and the Equalities and Human Rights Commission. From this perspective, I hope, therefore, that I can provide some answers to the questions arising on this issue.

First, has the Home Office taken the whole process seriously? I can say definitively that this exercise has been taken very seriously by the Minister and the army of civil servants working on its implementation. I cannot claim technical knowledge of research methodologies, but I have been impressed by the Home Office team responsible for the evaluation of the West Midlands pilot, led by Andrew Zurawan. As far as I can tell, the different techniques deployed by the in-house and external researchers—surveys, focus groups, mystery shopping, comparisons with a control area where the right to rent was not in force—have all been conscientiously carried out. I fully recognise the limitations of any pilot evaluation process: it may take years, not months, for effects to work through; larger-scale surveys or surveys at different times of the year could produce fuller results; and so on. However, within the obvious constraints of this exercise, I think the team did a pretty good job.

Secondly, what has been the outcome of these efforts to date? It was never to be expected that the critics of this measure would reverse their opinions and accept the right to rent as a good idea. Nevertheless, I detected that the arrangements, even in the pilot, were not proving massively onerous for landlords or property agents. With the subsequent improvements to the approach—revision to the guidance, clarification and simplification of requirements for documents—the position for the rollout from 1 February certainly seems to be generally, if somewhat grudgingly, accepted. I am simply not convinced that the right to rent is causing huge anxieties for landlords; I have talked to landlords and agents who are far more concerned about tax changes and other regulatory measures affecting them.

No respectable landlord would wish to be letting to someone who is here illegally, not least since that tenant might be apprehended and removed and leave suddenly with unpaid rent, so already, of course, there are referencing procedures for those applying for a tenancy. Now that it is possible to view the pictures of the required documents for those who do not have a passport, their legal status should actually be easier to check.

I raised the question at the panel with those representing managing and letting agents: would it be best to use a professional specialist company to handle this aspect of the vetting of your potential tenants? The response was that this would be a waste of money and quite unnecessary as the whole exercise was now straightforward enough. I wonder how many landlords do not seek proper references or carry out checks on the identity of people to whom they grant tenancies. I strongly suspect that the landlords who will be affected by this measure know very well the illegal status of the tenants and are taking advantage of them in extracting exorbitant rents for abysmal conditions. The great benefit of the Home Office’s interest in enforcing the right to rent in the West Midlands was shown to be in bolstering the efforts of local authorities to weed out some pretty unpleasant elements in the private rented sector. I make no secret of the fact that my own interest in this matter is based on the increased opportunities for prosecuting those who exploit people in overcrowded slum conditions.

Thirdly, what about the continuing anxieties that innocent landlords may unwittingly, through ignorance rather than malicious intent, still fail to identify an illegal migrant before allocating a tenancy to them, and, as a result, end up with a hefty fine? The panel has received a very clear message on the ongoing role of the Home Office in advising and supporting landlords and agents. Mostly people will go online and should now find the necessary information relatively easy to access. However, sometimes landlords or agents could encounter a lack of any documentation or have queries about the documents they do see. They will want a definitive decision from the Home Office itself. It is important to note that when Home Office officials are asked to check the identity of a potential tenant, they must respond within 48 hours. If the landlord or agent is not told that the individual has no right to rent within this period, the letting can go ahead. Based on experience from the pilot, the Home Office has geared up its staffing to meet its extended commitments. In addition to this checking service, everyday inquiries about the whole arrangement can be discussed with trained operators on an expert helpline.

Ministers have constantly reiterated the point that any prosecution requires a high standard of proof, demonstrating that a landlord actually knows, or has good reason to believe, that they are indeed letting to an illegal immigrant. Ministers have underlined the point that no one will be prosecuted for failing to identify a cleverly forged document or false passport, let alone be held liable if an illegal migrant moves in with a legitimate tenant unbeknown to the landlord. The Home Office will ensure that the CPS is fully aware of the policy intent. The object is to target the real rogues, the criminal landlords who knowingly and repeatedly flout the law. Nevertheless, if the Minister wishes to offer additional reassurances tonight to this effect, I am sure that would be appreciated.

Fourthly, is the Home Office investing enough in communications to ensure that landlords and tenants are alerted to the new requirement on them? The panel has received very regular reports on the many efforts being made to get the message across and I am confident that there can be no managing and letting agents who are still in the dark. Whether every one of the 1.8 million landlords in the UK is yet aware of the arrangement, I would not be so sure. However, I fear that some of these landlords are ignorant of a good many other responsibilities they should understand. This problem may be more to do with the way we organise rented housing in this country, with such huge numbers of “amateur landlords” who may have no expertise in property matters, rather than a problem with the Home Office. Of more concern is the issue of communicating with tenants who sub-let or owners who take in lodgers. These may well be harder to reach, despite the Home Office’s efforts, and it may take time for word to get around that checks are needed. In the early stages of the right to rent, tolerance will be needed if mistakes are made, and I note that the fine for a first offence, if it goes all the way to being prosecuted, is set at £80.

I fully accept that once the communications efforts have succeeded and most people are aware of the right- to-rent arrangements, there is the danger of discrimination against those who are in this country perfectly legitimately but might be thought to be illegal immigrants. Sadly, discrimination on grounds of race and ethnicity has not been stamped out in the private rented sector. It was discerned as much among landlords in the control area, where right to rent was not an issue, as in the pilot area. Whether the problem will get worse or whether the raising in the right-to-rent procedures of the profile of discrimination as an issue will counterbalance it, I cannot tell. Right to rent could get the blame for suspected discrimination when in reality the problem lies elsewhere.

Today I hosted the launch by Crisis of an excellent report on the obstacles to renting privately for people who are on low incomes or have been homeless. We heard how few landlords now accept anyone in receipt of housing benefit. Indeed, 82% of landlords said they were not willing to house those who are homeless or about to become homeless. Many people face enormous difficulties in getting a rented home, quite outside the considerations of right to rent. Ministers have promised to continue to monitor the position in relation to discrimination in particular.

Bearing in mind that the right to rent was introduced in 2014 and that, after evaluating a pilot that did not demonstrate any insuperable problems, negative impacts from this measure have been addressed by Home Office Ministers and officials as conscientiously as could be hoped for, I cannot conclude that the rollout of the right to rent should be the subject of that most draconian of measures possible in your Lordships’ House, a fatal Motion of annulment.

[Baroness Lister of Burtersett (Lab)]

My Lords, I have opposed these provisions from the outset, primarily because of the potential to increase discrimination in the housing market, but what is at issue now is whether full rollout of the scheme at this stage is consistent with the commitments made in both your Lordships’ House and the other place during the passage of the Immigration Act 2014. Like many other noble Lords who have spoken, I believe it is not.

The noble Lord, Lord Taylor of Holbeach, said then that the Government’s intention was that the provision would be,

“subject to a phased implementation on a geographical basis. This will allow a proper evaluation of the scheme to ensure that it delivers its objectives without unintended consequences such as discrimination”.—[Official Report, 10/3/14; col. 1648.]

Later, he promised a “carefully phased” approach to the implementation. I am sure I am not the only Member of your Lordships’ House who understood that to mean that there would be a series of pilots in different geographical areas and of different kinds to get a representative picture of its effects—not that it would forge ahead, after a single phase in a single geographical area, involving a quick and not completely representative pilot, with no proper public debate about what we have learned from it and just some changes to the code of practice, which ILPA argues,

“do not appear to constitute a substantive response to the concerns identified in the evaluation”.

I believe that sufficient concerns were raised to cause us to pause rather than steam ahead regardless, as urged also by the Residential Landlords Association on the basis of research that it has carried out. The only reason that we are having this debate is because of the Motions in front of us.

I have the greatest respect for the noble Lord, Lord Best, so what I am about to say is in no way casting aspersions on his role. I am sure that he will have brought the greatest integrity and expertise to overseeing the pilot scheme, but forgive me if I am cynical. A number of noble Lords have referred to this already but when the Prime Minister declared in May, five months before publication of the conclusions of all the hard work that went into the pilot,

“now we’ve got a majority, we will roll it out nationwide”,

surely it rather gave the game away. It suggested that the pilot would turn into something of a charade. It was as if all that important and serious work did not matter because a decision had already been made that it should be rolled out. All right, there have been some improvements to the code of practice but they do not amount to an awful lot.