Housing Benefit (Wales)

Albert Owen Excerpts

Thursday 1st May 2014 Westminster Hall

[David T. C. Davies]

My hon. Friend has made the point that I was about to come to. That supposition was put to us, very well, by one of the Ministers who gave evidence. I hope that today the Minister will be able to confirm that that is what has been happening.

The hon. Member for Ogmore raised the issue of housing. The Welsh Government estimate that about 14,200 homes need to be built each year until 2026. However, between 2005 and 2012 the average was only 7,200 houses—nowhere near the level that we will need to resolve the housing problem. Although the issue is devolved, I hope the Minister will do everything he can to encourage the Welsh Assembly to make greater efforts to ensure that the housing shortage in Wales is resolved.

Another issue of concern for the Committee was how to define bedroom size. We heard about people who had what were basically large cupboards or boxrooms that could end up being classed as bedrooms even though they were not big enough for anyone to sleep in. We suggested that the Minister might want to issue discretionary guidance to local authorities on what would constitute a room large enough to be counted as a bedroom, and I would be grateful for an update on that.

I turn now to something that was, frankly, an area of concern for me personally as well as for some—although not all—members of the Committee: direct payment of housing benefit under universal credit. I understand the reasons behind the policy, which I think are honourable. The aim is to ensure that people who have been on benefits long term get a sense of money management and responsibility; that was explained to me well by the Secretary of State. However, laudable though that is, I am still not entirely convinced that it is going to work. I have a fear about the policy, and the Committee expressed concerns—I should talk about the Committee’s view—based on evidence from housing associations.

In reality, the policy affects a lot of people who already have issues with money management and do not usually have large amounts of money anyway. If large sums are paid into their bank accounts, at the end of the month the money might not be paid on to the housing provider. In turn, that could have a big impact on housing providers that are dependent on money coming in to build further houses and to improve those that they have.

[Albert Owen (Ynys Môn) (Lab)]

I congratulate the hon. Gentleman and the Welsh Affairs Committee on this detailed report on an important issue. He is making an important point, and I am sure that he and other hon. Members will join me in paying tribute to the advice agencies and local authorities in Wales that help and support individuals in the management of their funds. Direct payment does not in any way help the housing problem, which remains a big issue. As the hon. Gentleman comes to his conclusions, which may be different from those in the report, is he saying that we have to build housing to help people, or is he suggesting that we suspend the bedroom tax until such time as we have adequate housing?

[David T. C. Davies]

I am certainly not suggesting that we suspend the bedroom tax—or spare room subsidy, or under-occupancy charge, or whatever it happens to be called. I am suggesting that there are widespread concerns about direct payments. Pilot studies set up in Torfaen—the right hon. Member for Torfaen (Paul Murphy) is in his place—suggested that debt grew when direct payment was put in place. There is great concern that some housing associations will struggle as a result of the policy. The Committee concluded that the financially sound decision would be to ensure that any tenants who have any problems at all with money management are able to continue under the old system. It may be laudable to encourage people to be given the money themselves to pay it on, but that will be impractical for a lot of people.