Welfare Benefits Up-rating Bill

Baroness Hollis of Heigham Excerpts

Monday 25th February 2013 Lords Chamber

[Baroness Stowell of Beeston]

I think I am right in saying that the noble Baroness was not here at Second Reading when I laid out the purpose of the Bill and its wider context. In response to her question, my point is that this proposal is about certainty, so that in the long-term it will result in a better future for everyone. It is also about taking measures now which are difficult and will affect people but which have the sole purpose of helping us to achieve a stronger economy so that in future years all of us will benefit. That is what I mean when I talk about certainty.

[Baroness Hollis of Heigham]

My Lords, as the Minister will recall, that is not exactly what the impact analysis said nor exactly what she said at the pre-meeting on this Bill, which was very helpful. I am sure that we all appreciated it. She made the point that it was about certainty for the markets, certainty for the Government and certainty for the claimants. Many of us pressed her on the fact that certainty for the Government, the markets or the claimants depended not just on what the level of inflation would be but also on what the number of claimants would be in order to get some estimate of what spending would be. The Government had no way at all of forecasting two out of the three factors that went into giving themselves some comfort about their uncertainty.

[Baroness Stowell of Beeston]

The point that I was making at Second Reading and continue to make is that certainty is a means to an end. It is through certainty for the Government, certainty for the markets and certainty in these measures that we will achieve a stronger economy. That is what I am talking about.

[Baroness Hollis of Heigham]

My Lords, this simply will not give you certainty. The whole of the impact analysis brief was a set of mythological language. This will not do what the Government claim. I understand that they are seeking to cut possible expenditure demands but to say that this is about certainty is simply an abuse of language, if I may say so.

[Lord McKenzie of Luton]

My Lords, I thank all noble Lords who have spoken in favour of Amendment 2: the noble Lord, Lord Low, the noble Baroness, Lady Meacher, and my noble friend Lady Lister. From the Minister’s response it seems that this is all about a better future for everyone, and that seems to encompass a rather strange load of decisions. My noble friend Lady Lister asked a question which I do not believe was answered. She raised the comparison with pensioners who are being protected—and we support that because they are not so readily in a position to make up their income by accessing the labour market. However, people are in the support group because they are not expected to be able to be in, or are some distance from, the labour market.

In respect of the WRAG, I think that the Government are generally drawing closer together the JSA group and the WRAG to blur that distinction. People in the WRAG were not expected to look for work. Yes, they were expected to be fit and were deemed to be fit for work-related activity, but there is a constant push by the Government to blur that distinction and ease them much more towards the JSA category, if that job is not being done, in any event, by the WCA and Atos.

The noble Lord, Lord German, asked whether this is a rough edge. It seems to me that it clearly is a rough edge—it has not been overlooked, and it is not being dealt with in any other way. It is a hit that people in the support group and the WRAG have got to take. It seems to me that this is incredibly mean-spirited. It just focuses on the support group—the people who are in the most difficult position and not able to access employment. The noble Baroness said that 65% of them were on DLA and acknowledged that DLA is outwith the Bill. What is the Minister’s understanding of the percentage of people in the support group who will end up on PIP rather than DLA?

In Amendment 3, the noble Lord, Lord Low, makes a broader case for removing ESA from the scope of the 1% restriction on uprating for those who are in the WRAG. It obviously goes further than our Amendment 2. We have made clear that the 1% uprating restriction should be removed in its entirety from all the relevant sums and amounts as defined, and we are grateful for the support of the noble Lord in that endeavour. If we are successful, the noble Lord’s amendment, and several others including our own, would fall by the wayside. Should we be unsuccessful we need to consider how we can at least move some way towards that objective.

As we have just discussed, we focused in our Amendment 2 on those in the support group. We did that because those affected are the most seriously disadvantaged—the furthest from the labour market—and because the Minister has made a commitment that this group would be protected. That commitment clearly is not being met. The noble Lord’s proposal that we should go further, beyond the support group, is entirely reasonable. Those in the WRAG are similarly judged under the WCA as not being fit for work although capable of work-related activity. But for those who seek work, we know that the prospects are not good. Not only do we have a work programme which is failing overall but there is at least anecdotal evidence to suggest that the hardest to help are not being properly supported. We have the shutting of Remploy factories, concerns over the looming bedroom tax, the restrictions on contributory ESA and the loss of the severe disability premium in universal credit. These have all added to the pressure on disabled people.

As the noble Lord, Lord Low, has said, the Bill will mean that people in the WRAG will be some £191 a year worse off by 2015. If we cannot carry the day on removing the 1% restriction across the board, we would look to support the noble Lord should he decide to pursue his line on Report. I beg leave to withdraw the amendment.

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[Lord Kirkwood of Kirkhope]

I am happy to support these amendments and have added my name to most of them. The House owes a debt of gratitude to the right reverend Prelate the Bishop of Leicester for raising these points. I particularly support his concerns about lone parents. Over the whole systematic process of change, my concerns are getting greater and greater about the compounding effect of all these changes that we see in the social protection available in the United Kingdom. Lone parents, who are mainly women, are struggling already, and we need to watch their situation with great concern in future.

My heart absolutely sank when I saw that this Bill was being applied to universal credit, because universal credit should be the future; it is the architecture around which we as a country should and must have serious consideration about provision for low-income households. We need to have a discussion with people such as my noble friend Lord Forsyth of Drumlean as well, between now and the next election. I hope that there will be a grown-up discussion about how the United Kingdom, as a poorer country, accommodates some of these new pressures, and I am willing to engage in that to the best of my ability. However, what is wrong about applying these two years of locked-down 1% increases is that they risk prejudicing the whole new future, as I see it, of how we cope.

In my experience, the administrative cuts in the health service prejudiced the view of a lot of people towards some of the NHS reforms. My real fear is that people will not know that the cuts are being introduced by the uprating Bill and will think, in the early years of universal credit, when they are transitioned across into the new system, that they are being sold a pup. That will potentially damage the public’s understanding of what universal credit is about and that is a real shame. I understand perfectly well all the arguments that the noble Lord, Lord Forsyth, makes, and we have to put up with them in the best way we can, but we should have isolated universal credit for the reasons that I have explained.

Further, I do not think that we know how universal credit will work out when it is in steady state, and it will take a long time to get there. I come back to the costs that will be saved by applying this uprating Bill to universal credit because I am a bit confused about exactly what the Government think they are going to save. Therefore, I make my first complaint—it is another moan—with conviction. The noble Lord, Lord Freud, bless him, has worked very hard to try to get universal credit to stand up. I read a worrying story in the Financial Times, which said that the self-employed have not yet been told that there is a real-time HMRC system heading in their direction. Not many of them know about it. That is more than slightly worrying—it is very worrying, because the computer system is essential to that measure working sensibly. However, we must try to do the best we can to make it work in future.

Secondly—again, the right reverend Prelate was right to give this priority—one of the best elements of universal credit is the way it deals with what used to be known in the old language as income disregard. Some of us have fought for years to do something constructive about income disregard. It is a very intractable problem and universal credit has given us an opportunity to get hold of that and provide incentives to get into work. Universal credit does that, but the first thing that the Government do after bringing in this new progressive reform is to cap it at 1%. How that is supposed to meld with everything else that has been done in connection with the Work Programme makes no sense to me. It will save relatively small amounts of money in terms of the big picture savings that the Government are trying to lock in, but for the life of me it seems a counterproductive, silly cut to introduce and it compounds my first point in that it makes the universal credit system look worse than it is.

The right reverend Prelate the Bishop of Leicester made eloquent and important points about child poverty targets. I concur with everything that he said, so I do not need to elaborate on that. My final point is about costs because I am struggling to understand the savings that have been alluded to. I do not expect the Minister to be able to do this off the top of her head but it would be helpful to me if, before Report, I could be told what the universal credit cost savings are in this measure because I cannot make any sense of the impact assessment. I agree with the noble Baroness, Lady Hollis, that it is—

[Baroness Hollis of Heigham]

Perfunctory.

[Lord Kirkwood of Kirkhope]

Indeed. I am looking at the Treasury Autumn Statement 2012, Table 2.1, which has a category headed, “Exchequer savings resulting from 1% uprating of benefits and tax credits”. This is over the three years, not just the two years in the Bill. The table also has a category headed, “Universal Credit: finalise disregards and increase by 1% for two years from 2014-15”. The figure given suggests that the saving for 2015-16 will be £640 million. However, my honourable friend Steve Webb, in a Written Answer to Stephen Timms on 13 February, identified universal credit additional savings as £20 million in 2014-15, £100 million in 2015-16 and £150 million in 2016-17. I am not sure how these figures relate to one another. I may be misreading the statistics and the tables may be drawn up using different bases, but between now and Report I would like to understand how these figures are worked out.

As the noble Baroness, Lady Hollis, said, the assumptions about how many people will be translated on to universal credit are best guesses, to put it mildly. I think the roll-out programme will take much longer, for the reasons that I explained earlier, and the story in the Financial Times compounds my anxieties in this regard. I think the figures that the right reverend Prelate gave of 10% of claimants being on universal credit by 2014-15 and 30% by 2015-16 are ambitious, to put it mildly, so can we have some greater clarity?

This is an important Bill. I understand the significance of the situation in which the Government find themselves. If I did not believe that before this weekend, all the financial circumstances of the past few days have confirmed the difficulty of the situation. However, before Report, we must try to get a better fix, in particular on the savings related to the universal credit inclusion in the Bill, because it is unclear to me. It is important and, from where I am sitting at the moment, I do not think that the savings are worth the candle. I would be much happier leaving universal credit out of the Bill. Let it be the future and let us all work on it, try to protect it and build on it in the best way we can. The Bill is a retrograde step as it affects universal credit, and I support these amendments for that reason.

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As housing benefit is particularly complicated, I will make two things clear. For those who continue to satisfy the income test for all income-related benefits, including housing benefit, their eligible rent will continue to be covered by housing benefit, as it is now. There will be no change for them. Secondly, work will continue to pay for those on housing benefit. Renters in low-paid work will still be better off than they would be on out-of-work benefits.

[Baroness Hollis of Heigham]

When the Minister talks about housing benefit, does she include local housing allowance? I think not.

[Baroness Stowell of Beeston]

No, I do not. The Bill relates to the personal allowance element of housing benefit. The noble Baroness refers to another announcement in the Autumn Statement. This Bill concerns the personal allowance component of housing benefit.

[Baroness Hollis of Heigham]

What about the personal allowance in local housing allowance?

[Baroness Stowell of Beeston]

I do not think that it is included, but I will check.

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[Baroness Hollis of Heigham]

Perhaps the Minister would write to me.

[Baroness Stowell of Beeston]

I think I am clear that the Bill refers just to the personal allowance for housing benefit. If I am wrong, I will of course correct that.

As I said, if we were to change the personal allowance for housing benefit, we would introduce inconsistency to the way in which this part of in-work benefit is calculated. There would no longer be consistency between the different kinds of personal allowances that apply to different benefits. In addition to increasing the complexity of the system, this would lead to additional costs.

Before I conclude, I will respond to a question from my noble friend Lord Kirkwood, who asked about costing methodology. I confirm that costs have been modelled and presented in a way that is consistent with the Autumn Statement. I will be happy to provide further details to the noble Lord before Report.

The Government are supporting working households. One of the key ways in which we are doing that is by taking tough decisions to reduce public spending, reduce the deficit and restore economic growth. The amendments tabled by the right reverend Prelate the Bishop of Leicester, including Amendment 13, would reduce the savings of the Bill by about 40%—or £800 million—in 2015-16 alone. Not including in-work benefits in the Bill would be simply unaffordable. Therefore, I ask the right reverend Prelate to withdraw his amendment.

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Moved by

[Baroness Hollis of Heigham]

7: After Clause 1, insert the following new Clause—
“Review of housing welfare benefits
(1) The Secretary of State must undertake a review of the current relationship between the amounts of housing welfare benefits in each local authority area and market rents in the same area during the relevant period.
(2) The relevant period in subsection (1) shall be each period of twelve months starting on 1 April 2013 and ending on 31 March 2016.
(3) A review under subsection (1) shall include an analysis of the effect of the levels of housing welfare benefits on the amount of private sector housing which is currently affordable by those in receipt of or entitled to such benefits.
(4) The Secretary of State shall cause to be published at twelve monthly intervals starting on 31 March 2014 a report of the evidence and conclusions of each review undertaken under subsection (1).
(5) The Secretary of State shall publish a response to each report under subsection (4) within three months of its due date, and shall take steps to amend the method used to uprate housing welfare benefits if there is shown to be a significant divergence between rent levels in the private rented sector and housing welfare benefits.
(6) In this section “housing welfare benefits” means housing benefit in the form of the local housing allowance or (as the case may be) the housing component of universal credit and “significant divergence” within the meaning of subsection (5) is to be defined in regulations.”

[Baroness Hollis of Heigham]

My Lords, as others have said, this is a modest amendment, so modest that I hope it is not only going to be acceptable to the Government but it might even be welcomed by them—you never know—as it only specifies how the firm undertaking given on 14 December 2011 by the noble Lord, Lord Freud, on Report of the Welfare Reform Bill will be followed through.

The noble Lord, Lord Freud, agreed:

“If it then becomes apparent that local allowance rates”—

that is, private sector HB—

“and rents are out of step, they can be reconsidered”.—[Official Report, 14/12/11; col. 1324.]

After I pressed him, he agreed to,

“change the word from ‘can’ to ‘will’”.—[Official Report, 14/12/11; col. 1325.]

So the substance of this amendment has already been agreed. This amendment is merely about process. The commitment made by the noble Lord, Lord Freud, needs to be embedded in primary legislation with follow-up regs so that we can have an agreed timetable and we can all enjoy what the Minister referred to as the certainty that would follow—certainty for the markets, should they be so interested, for the public, for the recipients and, above all, of course, for Parliament.

The noble Lord, Lord Newby, and the noble Baroness, Lady Stowell, did not have the considerable and extended pleasure of being active in the Welfare Reform Bill—how wise of them—so it might be helpful to them and the House if I retrace our steps a little. Why, first in Committee and then on Report, did we press for this review, which the noble Lord, Lord Freud, agreed to? The noble Lord, Lord Best, had already persuaded the noble Lord, Lord Freud, of the need for a high-powered independent review of the full housing implications of the Welfare Reform Bill for families. I pay tribute to the noble Lord, Lord Best, for persuading the Minister, and to the noble Lord, Lord Freud, for the open-minded, evidence-based way he responded, which was to agree to the review.

None the less, a partial and particular problem seemed to many of us to persist: the connection of the private rented sector—PRS—rents and local housing allowance; that is, LHA. Why? It is clear that we have three housing tenures—owner-occupation, PRS and social housing—but we have only one housing market and that housing market works effectively and efficiently only if there is a rough match between supply and demand, which there is not. We can all see that the housing market is currently in crisis.

Burdened with student debt and unable to build a deposit for owner-occupation while and because they are paying very high rents in the private rented sector, people in their 20s are now living in that sector not for five years but for 15. It is no longer tenure of transit but a permanent tenure of long stay. Rather like in the 19th century, when people consumed more potatoes whenever their price went up, as more people unable to afford to buy remain in the private rented sector, the more they push up demand and push up rents—which absorb more of their income and make it impossible for them to afford a deposit, move out and buy. So the higher the rent, the longer you stay in the private rented sector.

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[Baroness Stowell of Beeston]

I thank noble Lords very much for this debate. I should say at the start that although Amendment 13 is caught in this group, as I covered quite a bit of it in the previous discussion I will not go over it again, except to say that since the noble Lord, Lord Best, referred to the personal allowance of housing benefit, it is worth me repeating this for clarity’s sake. First, eligible rent will continue to be wholly covered by housing benefit for those who continue to satisfy the income test for all income-related benefits, including housing benefit. Secondly, renters in low-paid work will still be better off than they would be on out-of-work benefits. Work will continue to pay. Although that relates to the previous discussion, I wanted to say that again because the noble Lord, Lord Best, had raised it.

I turn to Amendment 7, tabled by the noble Baroness, Lady Hollis, and Amendment 12A, tabled by the noble Lord, Lord Best. As they have explained, their amendments seek to specify how the Government should monitor and review the uprating of local housing allowance. It is probably worth my saying from the outset that, as noble Lords know, I am new to this policy area and on housing I very much bow to the long-term experience and expertise of the noble Baroness and the noble Lord. I know that they have a huge amount of knowledge in this area.

Noble Lords should be aware that the uprating of local housing allowance is not covered by this Bill. Reference has been made to that; it is made under separate secondary legislation, providing independent rent officers with a remit to set rates under specified rules. None the less, I will try to respond fully to the issues that these amendments cover. Now might be a good point for me to reconfirm a point that I made in response to the noble Baroness, Lady Hollis, about personal allowance in LHA. What I said to her in response to the previous debate is correct: the local housing allowance simply sets the local maximum for eligible rents, and calculation of housing benefit to meet that eligible rent is not part of the Bill.

[Baroness Hollis of Heigham]

Can the Minister help me on the point that she made slightly before saying that it was not covered by the Bill, et cetera? It is certainly the case, is it not, that housing benefit and local housing allowance in the forthcoming year will rise by CPI? It is not caught by the 1% figure that other benefits are but thereafter, for the following two years, it will be capped by 1%. Is the Minister saying that that will not happen, or that it will but that it will done through the route of looping it through advice or instructions to rent officers by regulations?

[Baroness Stowell of Beeston]

Absolutely; it is the second. I am not disputing the fact that it will be capped at 1% for 2014-15 and 2015-16, but that will not be done via this Bill. That is just a point of process.

As noble Lords will know, the total bill for housing benefit has doubled in cash terms over the past decade and if unreformed by 2014-15, it would cost us more than £25 billion. This is why we are taking a number of measures to reduce housing benefit expenditure, including limiting increases in the local housing allowance to 1% for two years from 2014-15, as we have just discussed. This change will make a crucial contribution to the essential deficit reduction strategy but it will do more than that. As the Government are a major player in the private rented market, it will also exert downward pressure on rents—a point made by my noble friend Lord Bates. Where rents are increasing rapidly, there should be no presumption that the taxpayer should pick up the bill.

Noble Lords referred to the need to monitor affordability of accommodation for benefit claimants during the period where the limits are in place. The noble Baroness, Lady Hollis, paid tribute to my noble friend Lord Freud and his response when this matter was discussed during the passage of the Welfare Reform Bill. I certainly agree with what she described; I also agree with his decision. That is why we have already put in place a strong monitoring and evaluation plan. I reassure noble Lords that this is in place in light of that discussion that took place during the passage of the Welfare Reform Bill. My noble friend has honoured his commitment made at that time.

The Government have introduced a number of changes to the way that local housing allowance rates are calculated, including a cap on rates.

[Baroness Hollis of Heigham]

I am sorry to interrupt the Minister again but, before she goes on, she is saying that she confirms that the noble Lord, Lord Freud, made the commitment and that that commitment is now in the process of being delivered by a current review. Is she referring to the original review that was established by the noble Lord, Lord Best, is she saying that the terms of reference of that original review have been extended or, thirdly, is she saying that there is a further review for this particular aspect in order to deliver the pledge made by the noble Lord, Lord Freud, that he would keep under review any possibility of significant divergence between market trends and housing benefit?

[Baroness Stowell of Beeston]

I hope that as I continue to respond to the debate I will answer the question that the noble Baroness has just asked.

We have commissioned a consortium, led by Ian Cole of Sheffield University, to carry out an independent review of these changes. The interim report is due to be published in spring this year and the final report in early 2014. In addition, to monitor the specific effects of LHA uprating we have put in place a process for publishing on an annual basis a comparison of local housing allowance rates and the 30th percentile of market rents.

The first annual publication of these data took place in November last year and was carried out independently by the rent officers who set LHA rates and collect the most authoritative data on market rents. The noble Baroness, Lady Hollis, asked for some evidence. The published data show that only one-quarter of LHA rates have been subject to the CPI limit and more than one in 10 rates have actually fallen in line with local rents, to answer the point that my noble friend Lord Bates raised. At this moment we are not seeing a general divergence between LHA rates and market rents.

The noble Lord, Lord Best, and the noble Baroness, Lady Hollis, referred to several different potential outcomes from the changes that we have made. A couple of things were proposed, suggested or estimated during the passage of the Welfare Reform Act, one of them being a suggestion that 42% of landlords would scale back on housing benefit tenants. The reality is that the housing benefit caseload has actually risen in London by 5% in, I think, the past year.

The noble Baroness, Lady Hollis, suggested that no properties would be available to benefit claimants. Private sector landlords are not turning away housing benefit claimants. Since April 2011, when we introduced our first reforms of the LHA, the PRS caseload, as I just said, increased, and that includes London and the south-east.

The noble Baroness also made reference to rent control and suggested that that might be the way forward. We absolutely dispute that; we say that it would not make more homes available at rents that people could afford. We experienced regulated rents in the private sector some decades ago and they shrank from 55% of households in 1939 to 8% by the late 1980s.

[Baroness Hollis of Heigham]

I was not recommending rent control. I was merely saying that if you are not going to increase the supply and rents continue to rise—and all the evidence is that they are—then that is one possibility. It is not one that I support because I would much prefer the Government increasing the supply of stock.

[Baroness Stowell of Beeston]

I think that I have just provided the noble Baroness with some evidence to show that rents are not actually increasing in light of the changes that we have made. Rents are actually coming down. We are having some success in downward pressure on rents.

We have taken care to retain some flexibility to react if problems with affordability emerge along with the need to take action should significant divergences emerge between LHA rates and market rents. We have set aside £140 million over two years from 2014-15 to help people most affected by the new 1% limit. The noble Lord, Lord Best, referred specifically to effects in London, and I can confirm that the funding that has been set aside will be there to address areas precisely such as London and the south-east. Our intention is to increase the local housing allowance rates by more than 1% in areas where rent increases are causing a shortage of affordable accommodation. Rather than specifying the details in legislation now, however, we plan to develop our approach in spring this year before making final details available in the autumn so that we can reflect the views of key stakeholders and take account of the most up-to-date evidence before making decisions.

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I hope that I have addressed the points raised by the noble Baroness, Lady Hollis, on Amendment 7, and the noble Lord, Lord Best, on his Amendment 12A, and have demonstrated to all noble Lords that our existing plans show that we are ensuring that there is proper monitoring and review of the arrangements we have introduced, and that it is not necessary to include these in the Bill.

[Baroness Hollis of Heigham]

My Lords, I thank all noble Lords who have contributed to this small debate. The noble Lord, Lord Best, emphasised that housing benefit was a high-ticket item. He is right, so any percentage cuts to that benefit are highly significant in terms of the income as it affects tenant recipients. He also emphasised, and he was absolutely right to do so, the folly as well as the cruelty of sending thousands of families into higher cost temporary accommodation. I agreed with every word he said—I hope that that does not damn his speech.

I thank the noble Lord, Lord Bates, for a thoughtful contribution to the debate supporting the review. I am delighted that he agrees with the commitment of the noble Lord, Lord Freud, that such a review is desirable and necessary. Contrary to what the Minister was saying, he is right that private sector rents are alone among the housing triple tenures in rising fast. They are rising faster than inflation. That, as I tried to argue, means that it is impossible to leave that sector because by paying those higher rents you cannot afford to save for the deposit that takes you out of it. In turn, that raises rents still higher because nobody is leaving that sector but other people are trying to enter, which makes it even more impossible to leave it in the future. It becomes a vicious upward spiral in which people are trapped. The noble Lord, Lord Bates, is absolutely right that that is exactly what is happening. Poorer tenants are also faced with that higher increased pressure on rents with only housing benefit to help them cope with it, and that housing benefit is being cut three times over—first by being connected not to the 50th percentile of rents but to the 30th percentile, secondly by being capped by CPI for the forthcoming year instead of actual rent levels, and thirdly, in the subsequent two years, by a further cap of only 1%, which the Minister has confirmed to us. That means that more tenants will follow the desperately sad route that the noble Lord, Lord Best, emphasised.

As my noble friend Lord McKenzie said, quoting the Guardian article that I missed, that will mean more families with children being uprooted and spending longer periods in bed-and-breakfast accommodation. Many years ago, as a former chair of a housing committee, I saw how long it took those children, who were often traumatised by those events, to get over them. They had had to move home, move school and lose connection with their friends. At the age of seven or eight, they were reverting to bedwetting and the rest. That is what we are now going to be imposing on thousands more children because of the folly of this policy.

Finally, I come to the Minister’s comments. She emphasised that she thinks the policy is working and that according to her figures rents are already being driven down as a result. I listened carefully and I would very much like to see the evidence she has because it runs contrary to what the noble Lords, Lord Bates and Lord Best, and the National Landlords Association are saying; it runs contrary to my brief from Shelter and my experience of the housing market. It may be that the Department for Work and Pensions has a unique insight and extra special information denied to the rest of us, but it does not conform to what I know. Certainly it is the case that so far the CPI cap has applied for only something like 10 months of the current year. None the less, for the years thereafter—not next year, but two years thereafter—it is going to come down to 1%, so there is going to be an accelerating effect, a depression, on rent levels as a result of the rent benefit and housing benefit caps arising from the Government’s policy.

The Government are banking absolutely everything on the fact that by pressing and cutting down on HB, even though only 20% of those in the market have HB, you will reduce the overall level of rents and therefore tenants will not suffer. There is not a shred of evidence that I have seen or that has been offered tonight to support that contention. The Minister is gambling on the lives of children going into bed-and-breakfast accommodation in the ideological hope that 20% of those in the market can affect the rents that the other 80% will pay. They will not do it because landlords do not have to let, and they will not let, except those who have substandard accommodation that people who do not need housing benefit will avoid. That is a form of Russian roulette that none of us should be party to.

I hope that the Minister will write to me with her evidence because it does not conform to anything that I am aware of. In the light of that, I would like to reflect on what she has said and on what evidence she can send me. I will also reflect on whether what she is saying means that the Government are continuing adequately to keep under review the possible divergence that, from all the evidence we have, is already beginning to occur between rents and housing benefit. I beg leave to withdraw the amendment.

Amendment 7 withdrawn.