Welfare Reform and Work Bill

Lord Young of Cookham Excerpts

Tuesday 12th January 2016 Lords Chamber

[Lord Shipley]

My Lords, I hope that the Minister understands the seriousness of this matter. I do not want to repeat what other speakers have said. Suffice it to say that there used to be three sources of funding for supported housing: the Supporting People programme, specific grants, and the income from rent and service charges eligible for housing benefit. Given the deep budget reductions to the first two, it has left income from rent as critical to the financial viability of schemes. That is an important issue to be made clear, because if rents go down, the income inevitably goes down and cannot be replaced from other sources. As we have heard, that 1% annual rent reduction policy will have two consequences for supported housing: a reduction in new building and lower staffing support for schemes, and, indeed, the potential collapse of schemes, given that the management and maintenance costs of supported housing can often be a third higher than the general housing stock.

When I spoke on this matter at Second Reading, I said that there was a danger that if the preventive role of supported housing were reduced, it would push up costs in other parts of the public sector. As the noble Baroness, Lady Blackstone, has pointed out, there is evidence that the rest of the public sector has to pay out more if supported housing is not there to help people. A few years ago, the Homes and Communities Agency reported that there was a substantial net saving for the public sector from investing in specialist housing.

A further consideration is the evidence of the National Housing Federation, which has identified a shortfall of more than 15,000 units in the number of supported housing lettings available each year to people of working age. Furthermore, there is some evidence that the recent rise in rough sleeping is related to the lack of supported housing lettings. So the conclusion is pretty clear. I understand that the cost to the Government in agreeing Amendments 107 and 109 is around £75 million per year—I would be grateful if the Minister could confirm that number. If it is, then surely it is at a level low enough for the Government to accept the cost, because the advantages to the public service outweigh the cost of the £75 million loss.

[Lord Young of Cookham (Con)]

My Lords, I intervene briefly from these Benches to add my support to Amendment 109 in the name of the noble Lord, Lord Best. When I intervened at Second Reading, I mentioned that I wanted to return to this issue in Committee. Subsequent to that, the noble Lord, Lord Kirkwood, chaired a meeting on the Committee Corridor of a number of organisations which would be directly affected, and they made some very moving presentations about the implications for them if the Bill went through without further amendment. Subsequently, I added my name to the letter referred to by the noble Lord, Lord Best, to the Times, expressing the hope that the Government would smile on this amendment or give the necessary comfort in some other way.

As others have said, the last thing my noble friend wants to do is to precipitate the closure of valuable schemes run by voluntary organisations providing support to vulnerable groups. Indeed, that is why there is a whole clause in the Bill entitled “Exceptions”, and subsection (5) gives powers to the Secretary of State to do basically what he wants to. The exemptions that have been trailed so far by the Government are welcome, but I agree with others that they may not go quite far enough, and I wonder if we can just nudge the Government a little further to give a greater degree of comfort to those running these projects.

Housing: Spare Room Subsidy

Lord Young of Cookham Excerpts

Tuesday 22nd December 2015 Lords Chamber

[Lord Freud]

This policy is about making sure that people who are living in oversized accommodation take the decision either to downsize or find the funds to run the extra rooms. That is how this policy works, and we can see in this study that people are now making adjustments. There are substantial moves in various areas in terms of downsizing and finding work between the interim report and this final report.

[Lord Young of Cookham (Con)]

My Lords, is it not in everyone’s interests that there should be a better match between household size on the one hand and the size of houses and flats on the other, to avoid overcrowding and underoccupation? Does the survey not show a fivefold increase in the number of working-age tenants seeking to downsize? Does this not show that the policy is working?

[Lord Freud]

Yes, we have seen a substantial number of people downsizing—45,000 people have downsized within the social rented sector and another 12,000 have moved into the private rented sector. The number of people who have registered for downsizing is now running at 16%. Noble Lords may remember that when this policy started it was estimated from the surveys that about 20% of people would want to do so. We are well on the way to people making this adjustment. Other people, however, are looking to earn more money and to work. That is one of the factors, but not a major one, in some of the record employment levels we are now seeing.

Welfare Reform and Work Bill

Lord Young of Cookham Excerpts

Monday 21st December 2015 Lords Chamber

[Lord Curry of Kirkharle (CB)]

My Lords, I shall speak to Amendment 104A. I very much support the intentions of this Bill, but, of course, there are inevitably special cases that would be adversely affected by a change of this magnitude. The Government have been very clear in their intentions for this change, and I commend them for that. What I seek to amend, however, is not the principle of the clause, but its application. More specifically, I seek to amend this clause so that those who are in receipt of disability living allowance, or carer’s allowance and income support, are exempt from this change so that they can continue to receive support for mortgage interest as a benefit, not as a loan.

This clause was initially brought to my attention by a friend who attends my church. This man purchased a house in 2006 and was financially stable and secure. However, two years into his mortgage, he was diagnosed with a detached retina, which rendered him blind. As a consequence, he has had to cease working. He has been entitled to support for mortgage interest, due to being in receipt of disability living allowance, and carer’s allowance, as his wife is now his carer. With the help of SMI, his mortgage would have reached completion in 2030. At this point, he planned to downsize, using the extra equity to pay off other loans accrued since he was diagnosed as blind to equip his house as a result of his disability. However, the implications of the proposed change from interest support to a loan mean that 12 years’ worth of interest and a small capital contribution will need to be repaid. If interest rates stay as they are for the whole period, my friend, on top of his mortgage, will have to pay the Government back £63,000, the sum contributed by SMI as a loan, and £15,000 for the 5% interest on the interest owed each year. As I said earlier, I am in support of the clause in principle, but strongly urge the Government to reassess and reconsider applying the changes to those who are on disability living allowance.

My friend will be for ever incapable of working, and so would never be able to repay the loan. It is not right that such a burden should be placed on him and others like him—he is not unique—who receive disability living allowance. This change could potentially result in my friend losing his house and being forced to move into government housing, which would ultimately cost the taxpayer much more. Have the Government fully assessed the long-term implications of this? Surely, a successful policy is not one that saves money in one area, only for more to be spent elsewhere.

In conclusion, I repeat that I support the aims of Clause 16, but feel that it is entirely inappropriate for those on disability allowance to be treated in the same way as those on jobseeker’s allowance. The assumption is that those on jobseeker’s allowance will eventually get a job and be able to pay their mortgage in full themselves and also to pay back the loan. Those on disability allowance, however, might never be able to pay it back if they are for ever prevented from working. On these grounds, I urge the Government to reconsider the wording of Clause 16 and allow those on disability allowance or carer’s allowance to be exempt from the changes.

[Lord Young of Cookham (Con)]

My Lords, I listened to most of the debate this evening and have heard the arguments on most of the amendments. Without any discourtesy to those who have proposed these amendments, it seems to me that the case for these are less compelling than the case for some of the amendments that were discussed earlier. There is one fundamental reason for this: what this clause does is basically to convert what is at the moment a grant into a loan. Of itself, it does not affect the quantum of support from taxpayer to recipient: it simply converts the terms. Therefore, to my mind, this is a much less painful way of reducing public expenditure than some of the other measures of the Bill that directly affect the quantum of support from taxpayer to beneficiary. Perhaps it is for that reason that the Opposition’s reasoned amendment to the Bill in the other place said:

“That this House, whilst affirming its belief that … a benefits cap and loans for mortgage interest support are necessary changes to the welfare system”.—[Official Report, Commons, 20/07/15; col. 1264.],

specifically excluding this bit of the Bill from their general reservations. Any measure that reduces the quantum of saving from this particular clause just puts more pressure on some of the other measures in the Bill which directly affect the support that a beneficiary might get.

Turning to the point made by the noble Baroness, Lady Sherlock, in a sense she gave the case away by conceding that 39 weeks was the period for which people had to wait for roughly 10 years under the last Labour Government. If 39 weeks was appropriate when there was not the pressure that we have on public expenditure today, then it is certainly appropriate when we are trying to make necessary savings.

Welfare Reform and Work Bill

Lord Young of Cookham Excerpts

Tuesday 17th November 2015 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I have listened for the past six hours to this excellent debate with its high-quality maiden speeches with a growing sense of relief that I am no longer the Government’s Chief Whip, as some serious issues have been raised that will need addressing in Committee. As someone who was a Housing Minister, on and off, for 10 years and who chaired a housing association for seven years, I want to focus my remarks on the two clauses in the Bill that deal with housing, which were welcomed in another place by the Opposition Front Bench.

Looking at the clauses on support for mortgage interest, the Opposition spokesman said:

“We support reforms to mortgage interest support that will strengthen work incentives and deliver savings”.—[Official Report, Commons, 20/7/15; col. 1265.]

Of the rent reductions, which have been controversial in today’s debate, the Opposition spokesman said:

“We want…reductions in social rents that will deliver savings to the taxpayer”.—[Official Report, Commons, 20/7/15; col. 1273.]

So the housing element of the Bill ought to be less controversial than the rest of it.

Dealing first with support for mortgage interest, which was touched on by the noble Baroness, Lady Sherlock, and the noble Lord, Lord MacKenzie, turning a grant into a loan is a sensible way of cutting public expenditure without reducing support to the homeowner who faces difficulties. I will come to the extra waiting period in a moment, but it is difficult to justify the fact that a householder sitting on a substantial chunk of equity gets a grant from the taxpayer, leaving when he dies his estate to his beneficiaries, unencumbered by the help he has had from the taxpayer. It seems sensible to convert that from a grant to a loan, and I think that would be justifiable whether or not one was looking for savings in public expenditure.

There are extra weeks before the entitlement kicks in, but that simply restores the waiting period to what it was before the financial crash in 2009. I understand the concern that this might push up repossessions, which are at an all-time low, but I wonder whether a bank or building society would go through the aggravation of repossession if it knew that in a few weeks’ time it would get, direct from the Government, monthly interest in full on the sum in question. In view of the concern, I wonder if it would make sense for Housing Ministers to have a dialogue with the CML, perhaps to get a memorandum of understanding that repossession would not normally be activated if SMI was about to kick in. Ministers made it clear in another place that:

“We remain committed to helping owner-occupiers in times of need to avoid the risk of repossession”.—[Official Report, Commons, Welfare Reform and Work Bill Committee, 13/10/15; col. 356.]

I think that dialogue might help.

The reduction in social rents is of course welcome news to tenants, and not just those who pay the rent in full. Of course, some of those currently on housing benefit hopefully will float off it in the next four years and therefore benefit from the measure. Those who currently pay their rent will be able to plan, knowing that for the next four years one of the largest items in their budget will go down in cash terms. This is good news for tenants and good news for the DWP, in that it reduces its outgoings not just on housing benefit but presumably on other index-linked benefits as well, as the downward pressure on rents will influence the CPI.

However, as my noble friend will know, this saving is subject to the ONS changing its mind on housing association debt. It decided just a few days ago that, as from next March, housing association debt will score as public expenditure. This means that, far from this measure reducing public expenditure, it will push it up unless between now and next March the Government can make sufficient changes to the housing association regime to convince the ONS that it can be reclassified. Can my noble friend indicate how they are going to ensure that the ONS ruling is reversed? Of course, that was based on measures taken before the rent reduction and the voluntary right to buy was introduced. It is important that any deregulation does not undermine the creditworthiness of the movement.

What is good news for tenants and the DWP is less good news for investment in housing, as many noble Lords have said in this debate. Ever since housing associations were able to borrow from the capital markets, there has been a link between housing associations’ rents and the size of their investment programme. I confess that when I was Housing Minister, much of my capital programme was funded by the DWP through housing benefit, so any reduction in rent affects cash flow and the ability to sustain borrowing, and therefore affects the investment programme.

It is therefore important that any measures in the Bill that reduce the investment programme of housing associations be replaced by other measures in the Housing and Planning Bill, because there are two sides to this coin. If one side of the coin is reduction in rents in this Bill, the other side has to be measures to increase supply to counteract that in the Housing and Planning Bill currently in another place. I understand the points that were made about supported housing and the excellent work done by those who help the homeless, such as St Mungo’s Broadway and other movements. Clause 22(7) enables the Minister to make exceptions, and I am sure we will want to look at this in Committee to see whether we can safeguard the valuable work housing associations do to support vulnerable people.

My final point concerns an issue that has not been raised in this debate. Reducing social rents at a time when market rents continue to rise brings into sharp focus the question of who gets lifetime tenancies at a lower rent from a social landlord, as opposed to the other half of the market, which has to accept short-term tenancies at market rents from landlords who, in some cases, are not as good as local authorities or registered social landlords. Noble Lords with very long memories may recall the Local Government and Housing Act 1989, one of the objectives of which was to influence the level of social rents to market level, with housing benefit taking the strain. The golden age of Nicholas Ridley never actually arrived, for good reasons, but this measure makes a sharp step in the opposite direction, widening the gap between the two sectors. That means that we need to ensure that the stock of social housing is more accurately targeted at those who need it most. That means another look at lifetime tenancies and at measures to encourage mobility through the social housing sector, as families now decently housed find their circumstances have improved and they can make their way into market housing, freeing social housing for those who, like they were, are in desperate housing need at the inception of their tenancies.

This Bill is an important building block in getting public finances under control, but it raises serious issues for those who want to see an increase in housing supply. Those issues need to be developed when the Housing and Planning Bill reaches this House, and I hope to take a part in those proceedings.

Oral Answers to Questions

Lord Young of Cookham Excerpts

Monday 8th December 2014 Commons Chamber

[Mr Duncan Smith]

The same old rubbish from the Opposition! May I just remind the hon. Lady that this Government have done a huge amount for the poorest? The tax allowance is up to £10,000 by April, saving £825 per year. Under this Government, the national minimum wage has gone up by 3%, more than earnings and more than inflation. There are free school meals for primary school pupils—1.5 million children will be getting them. The cost of living is coming down, too. Food prices are falling, and motor fuel prices are down. The hon. Lady wanted to make this a political issue, but I remind her of what the Archbishop of Canterbury said today: it would be wrong to play political games with such an important issue. Perhaps she should listen more and speak less.

[Sir George Young (North West Hampshire) (Con)]

T4. Does my right hon. Friend agree that as unemployment continues to fall, we have a golden opportunity to offer work to those with a learning or physical disability? Will he confirm that programmes such as Work Choice and Access to Work and the work of his Department’s disability employment advisers will continue to have top priority, so that we can make yet further progress?

[The Minister for Disabled People (Mr Mark Harper)]

I completely agree with my right hon. Friend. In fact, the latest labour market statistics show that disabled people are sharing in the jobs that are being created, with more than 258,000 more disabled people in work over the last year, including 75,000 in the south-east, which will cover his constituency, and there are particularly sharp rises in the number of those with learning disabilities getting jobs, which he specifically asked about.

Parliamentary Under-Secretary of State for Welfare Reform (Disabled People)

Lord Young of Cookham Excerpts

Tuesday 28th October 2014 Commons Chamber

[Sir George Young (North West Hampshire) (Con)]

I begin by warmly congratulating the hon. Member for Heywood and Middleton (Liz McInnes) on her maiden speech. We all welcome her first contribution to debates in this Chamber. She spoke with warmth about Jim Dobbin, whom we remember with affection, and she obviously knew him well. She took us on a guided tour of her constituency. She spoke with confidence, humour and insight, and she clearly has a contribution to make, specifically on health matters. I would have visited her constituency during the by-election, but I was otherwise detained in Clacton. We look forward to hearing many future contributions from the hon. Lady.

I believe that this motion is opportunistic and misguided. I do not think that it furthers the interests of those with a disability or the organisations that care for them. The reaction of the audience at “Question Time” the week before last showed a distaste for the political opportunism that we have seen this afternoon. I am genuinely surprised that the Opposition did not learn the lesson from that reaction before they chose the subject of this debate and launched their highly personalised attack on a man who, as we have just heard, has done so much to advance the cause of those who have a disability. If I were charitable, I would say on listening to the mover of the motion, that I do not believe her heart was in it.

[Andy McDonald (Middlesbrough) (Lab)]

As the father of two disabled children, I found the remarks grossly offensive, as did every member of my family and my community.

--- Later in debate ---

[Sir George Young]

I do not doubt for one moment what the hon. Gentleman has just said, but I have not received one e-mail, one letter or one comment from one of my constituents about those remarks.

Of course there are times when there are policy disagreements on how best to enfranchise those with disabilities, be they physical or learning disabilities, and of course we should always be careful about the language that we use—as the former Prime Minister discovered when he referred to someone as a bigot. However, during the 40 years I have been in the House, I have been struck by the degree of consensus on how best to proceed with policy on disability, and I honestly do not believe that the exchange at the party conference justified the outbreak of partisanship that we have witnessed this afternoon.

Let me pick out two pieces of legislation relating to disabled people. The ground-breaking Chronically Sick and Disabled Persons Act 1970 started as a Private Member’s Bill, promoted by Alf Morris, and reached the statute book with Conservative support just before the 1970 election. Later in the 1970s, one of the first Bills whose Committee stages I attended introduced a non-contributory invalidity pension, which was the first of a new generation of benefits that replaced earnings for those unable to work.The other piece of legislation, which was mentioned earlier by my hon. Friend the Minister of State, is the Disability Discrimination Act 1995, which introduced a new right to non-discrimination in employment and which had all-party support. By and large, the House has made progress, driving forward the agenda, when we have been able to reach a consensus.

The objective that I hope we all share this afternoon was put well by Nicholas Scott in 1992, when he was Minister for Social Security and Disabled People. He said then:

“There is no difference of opinion in the House about the ends that we seek: the integration of disabled people, their independence and their participation in a range of activities, including employment, the securing of proper housing, recreation and sport. Above all, we want them to have control over their own lives.”—[Official Report, 31 January 1992; Vol. 202, c. 1251.]

I think that that is as valid today as it was then.

The thrust of policy under all parties has been to remove the obstacles that prevent someone with a disability from enjoying the same quality of life as someone without that disability. That has involved Government action, including action by my party.

[Stephen Lloyd (Eastbourne) (LD)]

I strongly support what my right hon. Friend is saying, and the tenor of it. As one who was involved in lobbying for the Disability Discrimination Act outside the House all those years ago, may I ask whether he agrees that a key part of disability empowerment is the Government’s Access to Work scheme? I should add, to be fair, that it was introduced by the then Government. It is very important for every penny that can possibly be invested in access to work to be invested, because it is a route that enables many people with disabilities to be helped into work.

[Sir George Young]

I agree with my hon. Friend, and in a moment I shall say a little about how more disabled people can be helped into work.

Over the past 40 years, there has been Government intervention to achieve the objectives that I have identified. We have the mobility allowance, which can sometimes be converted into the Motability scheme, and we have the disabled facilities grant. Both parties have used building regulations to make public buildings, in particular, more accessible to people with disabilities.

Let me now deal with the specifics. I shall try to adhere to the six-minute time limit, although it does not apply to me. We all want disabled people to have the sense of fulfilment, independence and comradeship that goes with having a job. My noble Friend Lord Freud was asking a genuine question, namely “How can we intervene in the market to enable everyone to work if some people work at a slower rate than others or need more supervision?” It was a genuine question, and we have not heard an answer to it from the Opposition today.

The debate then moved on to the minimum wage, in respect of which there are a number of exemptions, including one for company directors. During the meeting that took place at the conference, one delegate said that he had got round the minimum wage provision for his daughter by making her a company director, but that is a rather protracted and complex solution, which not everyone can adopt. What my noble Friend was trying to do was establish whether there were other solutions that would enable the same objective to be reached.

There is no dispute about the direction of social policy on those with disabilities, and I am not aware that the Opposition plan to repeal the measures that we have had to introduce in order to contain public expenditure. The speed with which we move in the direction in which we all want to move depends on getting the economy right. As with the national health service, so with support for disability: we need a strong economy if we are to take the agenda forward. No one has a greater interest in the success of the Government’s economic policy than those with a disability.

I think that the motion should be withdrawn, but if it is not withdrawn, it should be defeated, because it is an unwarranted personal attack. No alternative approach to disability has been advocated, and it risks breaking a bipartisan approach to disability that has served those with a disability well for the last 40 years.