Housing Benefit and Supported Housing

Lord Evans of Rainow Excerpts

Wednesday 27th January 2016 Commons Chamber

[John Healey]

My hon. Friend, who chairs the Select Committee on Communities and Local Government, understands this better perhaps than anyone in the House. There is no alternative to the supported housing needed by many of the most vulnerable people, and which they have at present. That is why Ministers must act immediately to exempt supported housing in full from the crude cuts and undertake a detailed consultation with providers about how such housing can be secured in future. Before Christmas, I revealed the scale of the problems facing people in specialist supported housing.

[Graham Evans (Weaver Vale) (Con)]

Will the right hon. Gentleman give way?

[John Healey]

No, I will carry on for the moment.

Since then, we have had a series of half-baked statements from the Government. The first was, “This is unnecessary scaremongering.” Not true—we are giving voice to the warnings and evidence from those who have the facts and will have to manage the consequences. Those are organisations the British public trust and respect, including Age UK, Mencap and Women’s Aid. Secondly,

“nothing will change until 2018.”

Not true—the cut and the cap apply to new tenancies from April this year, so the problem is immediate. My local housing association, South Yorkshire Housing Association, has told me that

“it takes time to rehouse anyone, let alone the most vulnerable people. Consultation on scheme closures will need to begin within a matter of weeks”.

No one will sign contracts for supported housing when they do not know whether the basic costs can be covered. New investment has already been stopped in its tracks: one in five providers have frozen investment and new schemes, according to the Inside Housing survey. Golden Lane Housing, Mencap’s housing arm, had plans for £100 million of investment over the next five years in supported housing across England, but they have been scrapped.

Thirdly,

“Additional discretionary housing payment funding will be made available to local authorities, to protect the most vulnerable, including those in supported housing”.

Not true—the fund is run by councils to deal with emergency applications from people already coping with the bedroom tax, the benefits cap, and the cuts in the last Parliament to the local housing allowance. Awards often run for only a few months. The fund is currently £120 million a year, and it is a short-term and overstretched measure.

Policy costing in the autumn statement scores the cost of the Chancellor’s housing benefit cut at £515 million. The Government proposed to top up the discretionary housing payments fund by not £515 million but £70 million. Housing organisations rightly dismiss the idea that the fund is the solution, saying that that is “nonsense and unworkable”.

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[Brandon Lewis]

We have been clear about protecting the most vulnerable people in our society; I will come to that in a moment. The hon. Gentleman is right. We need to continue to make progress in cracking down on fraud and error, and in local government as well—something that the Labour Government did nothing about.

[Graham Evans]

My hon. Friend is making some powerful points. Will he remind the House that the Government are issuing £800 million to be allocated to local authorities for discretionary housing payments, and that a further £40 million was announced in the autumn statement for supporting the vulnerable, particularly for refuges for beaten women?

[Brandon Lewis]

My hon. Friend makes a strong point. It is rare that I disagree with him, but the figure is slightly better than he says. There is £870 million coming through. He highlights the Government’s clear focus on these issues.

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[Graham Evans (Weaver Vale) (Con)]

I would like to put it on record that I, too, welcome the announcement on the 1%.

We spend more on family benefits in Britain than they do in Germany, France or Sweden. There is no doubt that social housing is invaluable for hundreds of thousands of people in this country who need help in getting accommodation, but it cannot be right to continue to subsidise people to live in houses that are bigger than they need while there are 375,000 families living in overcrowded conditions. Nor can it be right to subsidise people to live in houses that are out of reach or unaffordable for hard-working taxpayers.

Page 97 of Labour’s 2009 Budget summarised the problem:

“Indications…are that some claimants may be able to afford accommodation that is out of reach of working families on low incomes. Furthermore, costs of Housing Benefit have been rising above inflation despite static caseloads.”

In fact, between 1999 and 2010, the cost of housing benefit rose by 46% in real terms, reaching £21 billion. Housing benefit was truly out of control, with the maximum housing benefit award reaching over £100,000 a year. Even after the benefit cap, people can seek support for housing up to a rate of £20,000 a year. What would a working family paying tax have to be earning to afford rent of £20,000 a year? They would have to be earning £60,000, £70,000 or £80,000 a year.

Rents in the social sector increased by 20% over the three years from 2010-11 and were markedly higher on average than for like-for-like properties in the private sector. That is clearly unsustainable and helped to fuel the something-for-nothing culture that Labour presided over for 13 years. Some 1.4 million people spent most of the previous decade trapped on out-of-work benefits, while the number of households where no member had ever worked nearly doubled under Labour.

The announcements in the autumn statement followed on from reforms in the last Parliament to better align the rules between social and private landlords, ensuring fairness between those receiving housing benefit and the hard-working taxpayers who have to pay for it.

[Alan Brown]

Will the hon. Gentleman give way?

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[Graham Evans]

No, I will not.

Those who oppose making difficult decisions on welfare must say what they would cut or what taxes they would put up to pay for it. However, it would seem from some contributions by Opposition Members that Labour and its leader have still not learned the lessons of the past. Their plans to spend more, borrow more and tax more are exactly what got us into the mess before; and, as Labour’s great recession showed, it is working people and their families who end up paying the price for it. When we came into government in 2010, the country was borrowing over £150 billion a year. One in every four pounds spent by the then Labour Government was borrowed. Unemployment had increased by nearly half a million. Britain had suffered the deepest recession since the war and had the second biggest structural deficit of any major economy.

We have halved the deficit and are working to eradicate it by 2020. It is a fundamental truth that without sound public finances there can be no economic security for working families and the country cannot pay for the hospitals, schools and housing that people rely on. It is this Government’s long-term economic plan that is turning this country into a high-wage, low-tax, low-welfare economy. The Labour party is out of touch with hard-working people. Labour is out of touch, out of ideas on welfare and out of office—and, based on this debate, will be for a very long time.