Housing Benefit

Andy Slaughter Excerpts

Tuesday 9th November 2010 Commons Chamber

[Mr Clive Betts (Sheffield South East) (Lab)]

rose—

[Mr Andy Slaughter (Hammersmith) (Lab)]

rose—

[Mr Alexander]

I am going to make a little more progress.

There is a substantive question, and that is: on what evidential basis do the Government assert that rents will fall? In the debate involving the Bishop of Leicester last week in the other place, the Under-Secretary of State for Communities and Local Government, Baroness Hanham, in response to being challenged directly on the evidence that the Government could adduce for a fall in rents as a result of the changes, said that it was a “suggestion”.

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[Mr Alexander]

That is an outstanding point made by a tireless fighter for the people of Tottenham. I know that my right hon. Friend has already taken the opportunity to raise this matter directly with the Secretary of State, who I hope will be able to find an opportunity to respond to it.

[Mr Slaughter]

My right hon. Friend is right to analyse and dismantle the individual points made, but there is also a cumulative effect. The cumulative effect on my borough after these changes are introduced, if they are, is that 6% of neighbourhoods—seven out of 111—will be affordable to people in receipt of housing benefit. Mine is by no means the worst affected borough in London: all the central London boroughs are affected. If that is not forcing people out of London and making it impossible for people on low incomes to live in London, I do not know what is.

[Mr Alexander]

My hon. Friend speaks with force and knowledge about the impact of these changes in his own constituency. I hope that when Government Front Benchers reflect on the range of points that have been made about the impact on our communities and constituencies across London, they will take the opportunity to think again.

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[Mr Duncan Smith]

I will give way in a moment.

Around 40% of private rental tenancies are less than a year old, and 70% are less than three years old. What effectively happens in the marketplace is that there is a huge amount of movement. Another nonsense that Opposition Members have peddled over the past two weeks is that the sector is made up of a static group of people who have mostly lived in the same place all their lives and that we are about to uproot people who have a reasonable and rational reason to live where they are. In the past year, more than 100,000 people in the sector moved naturally. The idea that we will go in and raid all those homes is utter nonsense and scaremongering.

[Mr Slaughter]

The report referred to earlier says that independent research shows that 134,000 households will be evicted or forced to move when the cuts come in next year, and those are just the first set of cuts. It is the Government’s policy to get rid of new social tenancies and to raise rents for new tenants to 80%. Over a period, the exact effect of that combination of measures will mean that no one on a low income can live in the inner city. Will the right hon. Gentleman have the courage to admit that that is his Government’s policy?

[Mr Duncan Smith]

The impact assessment does not say that, and it is typical of the Opposition to take a figure for those who will be affected and assume automatically that they will be driven out of their homes. That is shameful.

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[Steve Webb]

I am not sure what the hon. Lady is questioning. Some 40% of private rented sector tenancies have housing benefit. That is a fact.

As my right hon. Friend the Secretary of State pointed out earlier, people have said in this debate that rents will not fall. There is an assumption that rents have to go up. I have news for those people: since November 2008 private sector rents have fallen by 5%, while LHA rents have risen by 3%. So there is a void. That is further evidence. Opposition Members have asked for evidence, and here is clear evidence that LHA is driving up rents.

[Mr Slaughter]

Will the Minister give way?

[Steve Webb]

Will the hon. Gentleman allow me? I want to respond to 35 different contributions; I hope that he will forgive me for responding to the debate.

My hon. Friend the Member for North East Hertfordshire (Mr Heald) pointed out how LHA is inflating the market. LHA rents are on average 10% higher than the housing benefit rents that have carried on from the previous system—more and more evidence that we, through our taxes, including taxes on hard-working families, are inflating rents. That is not benefiting tenants. During the debate it has been suggested that we are against the tenants, but we are actually against our taxes being spent on inflated rents, because that is not what the money should be for.

We have established that if we can get a grip on the rents, that will benefit tenants and help people in lower-paid work to pay those rents. There have been exaggerated stories about the impact, an assumption that rents will not fall, although we believe that our changes will have an impact, and thirdly—

[Mr Slaughter]

When the local housing allowance was introduced, the hon. Gentleman wrote on his website:

“Proposals of this sort risk creating ‘ghettos’ where low-income tenants are forced to move to accommodation in lower rent parts of town, whilst those who are better off continue to rent the best properties.”

When did he change his mind and stop worrying about that problem?

[Steve Webb]

That is interesting. I wonder whether the hon. Gentleman still supports the housing benefit cut taking away the £15 excess that the Labour party was going to introduce before the general election. If I remember rightly, Labour delayed that cut by one year—until after the election. Does the hon. Gentleman still support that Labour cut in housing benefit? I suspect not.

It is important that we have a discussion about fairness. My hon. Friend the Member for Colchester (Bob Russell) raised the situation of vulnerable people, particularly families with children. We are clear, first, that the impact of the changes as a whole is much narrower than has been assumed; secondly, that they will have an impact on rents, which will reduce the shortfalls and the number of people who will have to move; and thirdly, that there will be individual vulnerable cases. My hon. Friend is right to say that the position of families with children is very important. That is why we have trebled the money available to local authorities for discretionary housing payments specifically to help the most vulnerable. I recently had a conversation about a London authority that estimated that it would need to double its discretionary housing payments to cover these costs. We are trebling them, which we believe will enable local authorities to address the situation of the vulnerable households about which my hon. Friend is rightly concerned. I am grateful to him for raising that point.

The issue of fairness was raised by other Members too. My hon. Friends the Members for Hastings and Rye (Amber Rudd) and for South Thanet (Laura Sandys) rightly pointed out that many low-paid workers cannot begin to afford the sorts of rents we are paying for housing benefit recipients. The Labour party used to agree with us on that. Since they became the Opposition, however, they have stopped agreeing with themselves. There is a fairness issue therefore, and as we bring down rents we will improve the fairness of the system.

One of the key issues is housing supply, which my hon. Friend the Member for Colchester and others also raised. The shadow Communities and Local Government Secretary, the right hon. Member for Don Valley (Caroline Flint), rightly raised that issue as well. However, the housing shortage was caused by the Labour party, which failed to build sufficient numbers of houses when in office. Many Labour Members said that they wished the situation was different. Well, they had 13 years to make it different. It is no good their wishing in opposition that houses had been built. As they held the levers of power and they did not pull them, they have to accept and live with the consequences. That is why I welcome what my ministerial colleagues at the Department for Communities and Local Government are doing to generate new social house building so that there will be diversity in the social housing sector, with the most subsidised rents and also near-market rents—80% of market rents—which will provide the resources needed for the significant increase of 150,000 new social homes. We desperately need that increase during the course of this Parliament.

Many Members raised issues about the disincentive effects of the housing benefit system, and I want to draw attention in particular to the remarks of my hon. Friend the Member for Enfield North (Nick de Bois). He made some powerful points about the fact that once people are in work and on housing benefit—I do accept that there are people in work and on housing benefit—the benefits systems then traps them, because if they want to do extra work they face very high marginal withdrawal rates. My hon. Friend highlighted the situation of people who are in work and do not want to do more hours because they will just find that their housing benefit is withdrawn. That is a crazy system: we, the taxpayers, pay £21 billion a year to subsidise rents, and put inflation into rents, and then we expect people to do low-paid work, and as soon as they do more work we claw the money back.

That is going to change. This Government are doing to do something about it. On Thursday my right hon. Friend the Secretary of State will announce plans to take forward the proposition of a universal credit, whereby for the first time people will be guaranteed to be better off in work.

Housing Benefit

Andy Slaughter Excerpts

Wednesday 13th October 2010 Westminster Hall

[Margaret Hodge]

I agree entirely. There are several quotes in the press from senior civil servants demonstrating that they think the proposal will create the greatest dispersal of families that has been witnessed probably since the 19th century. Perhaps that is part of the political intent of the Government.

In my view, the litany of cuts that I have outlined—all of them, not just the housing benefit cuts—represent an historic assault on the poorest families in the poorest communities, which I think even Baroness Thatcher would have considered to be a bridge too far.

[Mr Andy Slaughter (Hammersmith) (Lab)]

I am glad that we have reached that point so early in the debate. Does my right hon. Friend agree that we seem to have moved from a position where the proposals look like ill-thought-out budget cuts to a position where they look like a deliberate policy to socially cleanse the poor from central London, which the Minister is defending? We have already seen that process in Hammersmith, with the demolition of council estates. The proposals will ensure that, for ideological and electoral reasons, it will no longer be possible for the mixed communities of London to continue to exist as they have for centuries.

[Margaret Hodge]

I agree entirely with my hon. Friend. In my view, the process is much more about political engineering than it is about achieving sensible reductions in public expenditure. I shall talk about the impact that the proposals will have in my constituency and the borough of Barking and Dagenham. In doing so, I hope to expose the flaws in the Government’s argument and what I think is the shameful agenda that they are, in fact, pursuing.

The Minister claims that the policy objective of the cap on local housing allowance—setting that cap at 33% of average local rents—linking housing benefit to the lower consumer price index rather than the retail price index and capping the total benefits that workless households receive, is to drive down rents. Let me tell him that he will not achieve his objective. His policies will not drive down rents. What they will do is drive out families—drive them in their droves out of the inner-London constituencies where they live to constituencies such as my own in the London suburbs.

Let us consider the facts—these are the facts from the Department for Work and Pensions, not my facts. In Brent, 9,650 families will lose from £18 a week to £160 a week and the families who will lose the most are those with the most children. In Hackney, 16,440 families will lose from £13 a week to £125 a week, and again the families who will lose the most are those with the most children. We can also take the example of Camden, where 2,940 families will lose from £20 a week to £262 a week, and yet again the families losing most are those with the most children.

It is simply nonsense to believe that the rents in Brent, Hackney or Camden will go down. A survey by London Councils found that 60% of landlords who are renting to tenants in receipt of housing benefit would not be prepared to reduce their rent by even a small amount if their tenants could no longer afford to pay the existing rate because of the reduction in local housing allowances. More than 90% of landlords said that they would try to evict a tenant or refuse to renew their contract if the tenant fell into arrears, if the shortfall in rent was more than £20 a week. Those landlords know that their properties will not lie empty. We all know that there is a massive shortage of housing in the capital and we know that, with the drying up of the mortgage market, more people are being forced into the private rented sector, which in turn increases demand in that sector. We know that the buy-to-let market is booming, because investors can get a good return on their properties. Landlords will not lower their rents, but poor people will be forced out of their houses.

Do not just listen to me on this subject—listen to Boris Johnson, the Conservative Mayor of London, when he says in the briefing that he prepared for today’s debate that the Government’s proposals will lead to

“the loss of the private rented sector as a major safety net for London boroughs”.

He continues:

“We expect landlords to leave the housing benefit market due to the perceived instability of housing benefit in the short and medium term”.

Those are Boris Johnson’s words, not mine.

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[Margaret Hodge]

I accept the point that insufficient priority was given to the building of council houses under the Labour Government, but we must deal with the situation in which we find ourselves. Making the position worse by deliberately forcing the poorest families out of the only homes that they can find is an outrageous and cruel act of public policy.

Does the Minister accept or even understand that if the reforms proceed, inner London will become a no-go area for the poorest people in our communities? What will be the further impact on my constituency? He knows well that changes in housing tenure over the past 20 years, since the introduction of the right to buy, have created deep social tensions in Barking and Dagenham as new people have moved into the borough and established residents have become unable to secure homes for their sons and daughters. The extreme right and the British National party tried to exploit people’s legitimate frustrations for divisive and evil political ends. We saw them off, but this Government’s housing benefit policies will inevitably reignite those tensions as private tenants from inner-London boroughs compete for homes with established residents of Barking and Dagenham. Has he considered at all the implications for social cohesion of his short-sighted reform proposals?

Has the Minister also considered his policies’ impact on local authority services? If Barking and Dagenham suddenly experiences an influx of literally thousands of families, what will that do to local schools and hospitals, to special educational needs provision and to child protection services in the borough? The proposals will place an unacceptable strain on local authorities in the more deprived outer boroughs—authorities that are already struggling to meet their communities’ needs in areas such as housing and education while planning to meet the 25% to 40% cuts that will be forced on them by the comprehensive spending review announcements next week.

In education, for example, Barking and Dagenham is already facing the huge challenge of keeping up with the pace of demographic change. Demand for primary school places is a particular problem not only for my constituency but across London. As it is, the local authority is having to create hundreds of new reception places every year—337 extra primary school places are needed in 2011 and 247 in 2012—and does not have sufficient funding to meet projected demand. The borough simply cannot cope with further significant levels of inward migration.

Barking and Dagenham council already has a housing waiting list of more than 11,000. That waiting list will only grow longer as more people move into the area and more households seek to be housed by the local authority because they have been priced out of the private sector.

[Mr Slaughter]

As my right hon. Friend may know, that is already happening. Kensington council is urging people to move out before the rush starts. Hammersmith council is urging overcrowded families to give up their secure and assured tenancies and to move into the private sector and rely on housing benefit, without telling them that they will then have to leave the borough next year when that benefit is cut.

[Margaret Hodge]

That is outrageous. I must also tell the Minister that I am absolutely convinced that within a year or two, boroughs and authorities such as Kensington and Chelsea or Hammersmith, from which families move out to areas such as Barking and Dagenham or Tower Hamlets, will cease to take responsibility for providing all the other local authority services that those families will need. They will then be an additional burden on those local authorities.

Who will foot the bill for social services and support for those families? They are already on the edge, and they are bound to make greater demands as they are uprooted from their inner-London homes and lose their links with the local services on which they depend. Has the Minister properly considered the impact of the proposals to cut housing benefit on the demand for other local authority services? Has he received advice on whether the proposals will increase homelessness and child poverty, as I believe they inevitably will?

The reforms will not achieve what the Government claim, but that is only half the story. The truth is that the Government want to drive low-income families out of inner London and other wealthy areas. London Councils estimates that at least 82,000 London households will find themselves in that position, and that is without taking into account the impact of the measures announced at the party conference last week. People will not have the option to move to a cheaper property in the same area because there will be none, unless they are prepared to downsize and move into overcrowded accommodation. They will have no choice but to move to areas where rents are more affordable. That will be a tragedy for families and communities. It is completely wrong of the Government to implement such a policy, with the full knowledge of the demographic upheaval that it will cause, and to leave local authorities to cope with the consequences.

We will also lose the diverse communities and social mix that have been a part of London’s character for generations. Central London will become the home of young professionals and the very well-off who, conveniently, can be relied on to vote Conservative. Those struggling on low incomes will congregate in the outer boroughs, which will become more disadvantaged, overstretched and troubled. The reforms will cause suffering and push more families into poverty by forcing them to contribute more of their income to housing costs. Members of all parties recognise the need to reform housing benefit, but this is not the way to go about it.

The reforms have not been properly thought through. They have the potential to cause hardship of a kind not seen since the creation of the welfare state, and they have been informed by a disgraceful political calculation. How a Liberal Democrat can attempt to defend them is beyond me. What evidence do the Government have to support their claim that the new cap will reduce rents in the private sector? What additional resources will be made available to help local authorities such as Barking and Dagenham cope with any significant increase in inward migration? Finally, how will the Government keep their promise to eradicate child poverty, given the hardship that their policy will inflict on low-income families?

Housing Benefit

Andy Slaughter Excerpts

Tuesday 13th July 2010 Westminster Hall

[Mr Andy Slaughter (Hammersmith) (Lab)]

It seems a long time since the Budget, and this policy on housing was probably the worst of a number of shocks on that day, particularly for London MPs. We have had time to reflect, and we have seen a pattern of announcements. If we look at the announcement about Building Schools for the Future last week, or that about the NHS yesterday, we see a systematic attack on the welfare state, and major changes that are being done without consultation or advice. To my mind, that looks like the legal definition of recklessness—we are either giving no thought to the consequences of our actions, or we are giving thought to those consequences, but pressing on regardless. I would be interested to know whether the Minister has given this policy any thought. He has a reputation for doing that.

I do not know whether this degree of recklessness is the new politics, or whether the Conservatives expect the Liberal Democrats to hold them back. There is little sign of that at present given the rather slavish and shameless way in which the Liberal Democrats adhere to those policies, which are attacks on the poorest communities in this country. I hope that the Minister will speak not only on behalf of the Government, but on behalf of his party to explain how he can defend his actions. He would be well advised to take advice.

Citizens Advice has produced an excellent brief for this debate that claims that there will be a marked increase in poverty, debt, rent arrears and homelessness, as well as negative impacts on family relationships. The National Housing Federation has estimated that homelessness will rise by 200,000. I feel most strongly about the fact that this policy will destroy mixed communities in London. We are proud of those communities, and not only poorer people but better-off people enjoy living in places such as Shepherd’s Bush, Hammersmith and many other areas in London. Such areas have a uniqueness that is not found in many other countries in that people of all backgrounds, incomes, races and religions live together harmoniously. This policy is destroying that. It is just one way in which the Conservative party has sought to destroy the communities that I represent, but is a particularly pernicious way that will lead to the return of Rachmanism in London. It will lead to appalling housing conditions being promoted by the Government, which is something that I hoped never to see in this country. I congratulate my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) on securing this debate. As she said, this policy is full of contradictions and is driving out those people who can get work and who, to a large extent, do work in London.

Given the limited time available I will not repeat what my hon. Friend the Member for Hampstead and Kilburn (Glenda Jackson) has said, but there is a myth that people in receipt of housing benefit are scroungers and that they are staying out of work. Shelter stated:

“The vast majority of housing benefit claimants are either pensioners, those with disabilities, people caring for a relative or hardworking people on low incomes, and only 1 in 8 people who receive housing benefit is unemployed.”

There is a myth that housing benefit is generous, although half of people who receive it pay an average of £23 a week towards their rent. There is a myth that people are living in luxury. We know the stories that Tory central office plants in the Evening Standard, which is frankly a disgraceful way to pillory the millions of people who are reliant in some degree on housing benefit in this country. At present, the level of accommodation is low.

The biggest myth of all is that people choose to live in that way. Almost everybody I know who receives housing benefit would prefer to have a secure or assured tenancy in an affordable home. To give some figures, the director of finance of Hammersmith and Fulham council estimated that initially the cap would mean 750 families being unable to afford to live in the borough—I suspect many more once we have taken into account other factors, such as the six different changes. The cap alone means thousands of people not being able to live where their families live, where they have grown up, where their work is or where their children go to school. In comparison, in the past two years the Conservative council has given planning consent for only four new affordable rented homes, although even that scheme is in doubt.

Do not blame the people who are receiving housing benefit for the problem. I blame Conservative councils in particular, but also Liberal Democrat ones. [Interruption.] My hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) agrees about the Liberal Democrats. Those councils have singularly failed through the planning process and their own means to build affordable homes in London over the past five years. What I find particularly pernicious—

[Bob Blackman (Harrow East) (Con)]

Will the hon. Gentleman give way?

[Mr Slaughter]

I do not think that I have time—I would like to, but it would be unfair on other people.

A degree of trickery and blackmail is used by Conservative councils and, I am sure, Liberal Democrat ones—I have to include them now—to force people into the private sector. They say, “Give up your tenancy in order to get more space. If you want your families to live in more than a one-bedroom flat, move into the private sector.” I have such cases every week in my surgery. I now have to inform those people that if they do so, not only will they be in an insecure tenancy, but in a year’s time their rent will be capped and they will be forced to move out of the area altogether. They simply do not know that.

I praise the campaign that Inside Housing magazine is running on the issue, and I praise the efforts of many London MPs, but the policy needs a rethink even at this stage. The Minister needs to go back and look at the implications, which he clearly has not yet done.

Capital Gains Tax (Rates)

Andy Slaughter Excerpts

Monday 28th June 2010 Commons Chamber

[Mr Duncan Smith]

I give my hon. Friend absolute confirmation that we shall consult widely. As he knows, we are planning to reform the benefit system so that it no longer acts as a major disincentive for people to go back to work. We have had to take decisions in the Budget, but beyond that we want to bring forward changes that make work pay—significantly for those going to work for the first time, as they understand. My comments at the weekend were about the need to recognise that often people want to move 10 or 15 miles to take a job, but they worry about the cost of travel to work or losing their house. The coalition has to look at that sort of thing to see whether we can make it easier for people to make decisions and take risks without being punished every time, as with the last Government. It is worth remembering that, of all social housing tenants—it is a falling figure—only 5% change their houses during the year, whereas 35% of low-income private tenants change. That is the problem: they are static, and they are stuck in what they do.

[Mr Andy Slaughter (Hammersmith) (Lab)]

When will the right hon. Gentleman publish more details of the proposals for the cuts in housing benefit? The local authorities affected, such as mine in Hammersmith, which is a Conservative authority, really do not know what is happening, other than that 750 families, at least, will have to move out of the borough because even the substandard accommodation that he clearly wants them to move into is not available in central London. How does he expect those families who move to areas where less work is available than in central London to find jobs, as he says that he wishes they would?

[Mr Duncan Smith]

In fact, over a third of all the properties available for rent are available below the 30th percentile. The reality is that property is out there, and we know that we can do it. Of course, I did not say at any stage that these changes would be easy. They will not be easy—we recognise that—and they will not happen overnight. They will not start until next October, and most cases will be reviewed only on their anniversary, which could be anything up to a year and a half or two years away.

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[Yvette Cooper]

I want to make some progress before I do.

The Secretary of State also said that he wants to make work pay. Yesterday he told Sky that there are marginal tax rates of 90p in the pound for some young people, that that was regressive and that he wanted, first, to change the system so that they are able to keep more of their own money. But, page 69 of the Red Book shows that as a result of the Budget an extra 20,000 people will lose more than 90p in the pound.

We agree that housing benefit needs reform, and we brought forward some measures in the March Budget and introduced a consultation paper last December to set out our proposals. We agree also that we have to stop some of the most excessive rents being paid, and that we should exclude some of the highest rents in every area. However, we should also consider how we provide more security and payments for people moving into work, so that work incentives are improved. There is a strong case for linking housing benefit to tax credits in the longer term, but the Government’s proposals do not set out any reforms; they set out only cuts, and destructive ones at that. Their plans cut almost £1.7 billion a year from housing benefit, and there is no analysis of how many people that measure will push into poverty or homelessness.

[Mr Slaughter]

There are clearly no poor people left in Southwark—certainly none on housing benefit, or the hon. Member for Bermondsey and Old Southwark (Simon Hughes) would not have the temerity to support the Budget. However, there are poor people in Hammersmith, Islington, Westminster and Kensington, so does my right hon. Friend agree not only that it is wrong to force thousands of families out of London, but that such measures will do nothing to get people into jobs, nothing for family break-up figures and nothing for community cohesion in London?