Benefit Cap (Housing Benefit) Regulations 2012

Lord German Excerpts

Tuesday 6th November 2012 Grand Committee

These are some of the question that we have arising from these regulations and the cap. We believe that they are ill-thought through and should be withdrawn for further consideration.

[Lord German]

My Lords, I want to examine the two areas of change which took place during the final days of the passage of the Welfare Reform Act. These were, of course, the extra £120 million of discretionary housing payment and the nine-month grace period. However, I start by saying that my party opposes regional pay in this country—as does the Labour Party in Wales—very strongly indeed. Ipso facto, for the same reasons we oppose regional benefits. The reason given by the Welsh Labour Party for the opposition to regional benefits is that they trap people in poverty. In this case, we in my party find ourselves on a similar message: having uniformity of these issues around the country helps to encourage prosperity across the country. I hope that that message will be borne out. However, I recognise that the major difficulties of the benefit cap relate to London, as the impact assessment clearly states.

I do not wish to add to the huge array of all very valuable questions that the noble Lord, Lord McKenzie, has just outlined. However, it is very important that the guidance for local authorities and customers is made available in as open and detailed a manner as possible. I note the very friendly document titled Benefit Cap—Frequently Asked Questions for Local Authorities, in which local authorities would expect to find answers to some of these questions. Nowhere in this document does the DWP reference any information about the discretionary housing payment. Will my noble friend tell me where, when and in what format that detailed guidance to local authorities is going to appear, so that people can be aware of the answers to some of these questions? Perhaps the issue of distribution of discretionary housing payment needs to be well known as well. I presume—although I have not been able to find the exact percentages and figures given—that it is related to the impact of the cap on housing benefit in each local borough and local authority. Perhaps my noble friend could clarify that.

I further note from the impact assessment that the figure of 56,000—considerably less, of course, than the number we were led to believe would be affected by the cap from the earlier impact assessment—takes no account of behavioural change. Could my noble friend tell me how, in his expectation, that behavioural change is likely to play out? Is it likely to reduce the numbers substantially, or just in a minor way? Has any work has been done by the department on that change?

One key issue that my noble friend mentioned was the ability to exempt oneself from the cap by making oneself available for working tax credit. There is always a process in getting oneself into work and into a working tax credit position. I wonder whether that period of transition, which may not take place until such time as the cap actually hits, will be taken into account through some support process by the department. Could my noble friend explain that?

I am also interested in the impact upon London. I would not want to say that it is a very strange place, but it is a very different place in terms of housing. I can only quote my own example. I just renewed my two-year rental on a flat in London, and my rent went up by £2.50 per week after two years of being stable. I just could not understand; I was expecting it to be much larger than that.