Welfare Reform Bill

Baroness King of Bow Excerpts

Tuesday 13th September 2011 Lords Chamber

[Baroness King of Bow]

My Lords, we all believe in welfare reform, making work pay and simplifying the benefits system; and I am sure none of us envies the Minister his job. However, these reforms cut benefits to the point where they undermine the principles of the welfare state and remove the final safety net from some of the most vulnerable people in Britain. I confess I am shocked by the Bill’s consequences as it currently stands. I also have another confession: I am one of those Labour politicians who knows there are genuinely enlightened Conservative politicians. That is something I simply would not have believed as a child. Lib Dems, of course, have often espoused the same progressive social policies that I believe in. In fact, I remember many occasions when Lib Dem MPs stood alongside me and other Labour Back-Benchers between 1997 and 2005 to challenge our Labour Government’s record on housing—in particular they lambasted Ministers for not doing enough to support private tenants, especially those on housing benefit.

What are we to make of those same Lib Dems now backing Tory plans to drive a coach and horses through the housing safety net? This Bill will, in effect, drive the poor out of inner London; it will leave thousands facing eviction and homelessness. Do not take it from me: research done by the University of Cambridge for Shelter found that cuts to LHA will lead to 134,000 households either being evicted or forced to move. Or take it from Conservative Mayor Boris Johnson, who was moved to describe these cuts as “Kosovo-style social cleansing”. I thought that was taking it a bit far, but DCLG seemed to back up some of his concerns. Its modelling calculated a likely 20,000 extra homelessness acceptances as a result of the total benefit cap—and that comes on top of the 20,000 additional acceptances already anticipated as a result of the other changes to housing benefit. DCLG helpfully summarised the situation, saying that,

“it is likely that the policy as it stands will generate a net cost”.

So there we go. Not only is it going to cause untold human suffering by forcing people out of their homes, but it is going to cost us money. It just does not add up.

This dose of truth obviously did not go down too well at the DWP. The Minister even took the trouble to write to my own local newspaper, the East London Advertiser. I am sure he was writing to local newspapers up and down the country, but none the less the East London Advertiser got news, fresh from the horse’s mouth, that:

“Scare stories that housing benefit changes will force thousands of London families from their homes are nonsense and are causing unnecessary distress”.

And yet his own department’s impact assessment tells a different story. It is a story of unnecessary distress, and it will ruin lives. In Tower Hamlets, the DWP impact assessment shows 1,900 households affected by the move from the median to the thirtieth percentile of local rents. In English, that means those households lose on average £20 to £30 a week.

The impact assessment also shows that 970 families were affected by the caps already introduced in April. Those households lose, on average, £20 to £30 a week, depending on property size. I know the Minister has suggested that these families will be able to negotiate a lower rent with their landlord. If he genuinely believes this, I implore him to give us some evidence. If he feels that this may not be the case, that landlords will not will not just throw up their hands and say, ‘Oh, okay, I’ll lower your rent’, I say in all sincerity that maybe he will give those tenants some rights to challenge their landlords, because otherwise he is literally casting them adrift. He might also wish to let them know whether, if they cannot make up that shortfall, they should use their jobseeker’s allowance or child benefit to cover these shortfalls.

The week before the Minister’s letter appeared in the East London Advertiser, in the Answer to a Written Question I tabled on the numbers affected by his reform to the shared room rate of local housing allowance, he stated that,

“320 claimants in Tower Hamlets would have their local housing allowance reduced”,

adding that:

“The average loss per loser is estimated at £109 per week”.—[Official Report, 29/6/11; col. WA 440.]

Can the Minister tell me how someone on jobseeker’s allowance of £65 per week can find an extra £109 per week to pay their rent? With all respect, I truly believe the Minister is not inhabiting the real world. That is the most respectful way I can put that issue. I suspect the Minister may fall back on the usual claim that these single people should all move into shared housing, or that his £20 million discretionary housing payment fund will help them bridge the gap, but neither claim bears scrutiny and if I had more time I would explain why. Should the Minister wish to let me describe the reasons why I do not feel they stack up, I would be delighted.

The Minister has made a small concession to help a few hundred vulnerable, homeless Londoners living in hostels. That is very important, and I welcome it, but again what about everybody else? In Tower Hamlets, the pressure on the discretionary housing payment budget is already so intense that the initial length of awards has already been cut from 10 months to just four months, and that is before a lot of the other cuts have impacted. Whatever its theoretical advantages, the universal cap of £26,000 introduced by Chapter 1 of this Bill will undoubtedly make a bad situation far worse. I recognise that this cap is superficially attractive in its simplicity, and I am attracted to it myself. It is the level of the cap that I disagree with, and as my noble friend Lady Sherlock stated concisely, fairness has been sacrificed for simplicity. It just is not fair that parents will be left with the stark choice of paying their rent or feeding their kids. It also is not fair that Clause 68 increases the local housing allowance in line with CPI inflation, meaning that in real terms the costs of private rented housing will not be covered. That puts claimants on the rack and tightens the screw year on year.

However, there is something in this Bill that I object to even more strongly: the unforgivable scrapping of the discretionary social fund and its replacement with a system of hand-me-down or in-kind charity. As someone who helped many constituents make those applications, I understand the benefits and weaknesses of those schemes but let us be clear that the benefits far outweigh the weaknesses. The reforms which Yvette Cooper suggested last March were adequate to address those problems. Instead, the Bill pushes the poorest further into debt.

The argument should not and cannot be reduced to deficit reduction. I accept the need for deficit reduction. What I reject with some outrage is that the Bill seeks to reduce our national debt by increasing the personal debt of the very poorest. If you are going to take money from people’s pockets, take it from people like us in this Chamber. Do not take it from people who have not got the money to buy a bed, a fridge, a cooker or a cot because if you do, you either force these people to live in conditions that shame this country—like those of the family I visited, where the baby sleeps in the bath—or force them into the hands of loan sharks and an inescapable debt trap. The Government have dumped the responsibility for this on local authorities without any guarantee of funding or any requirement to continue the current eligibility criteria.

I will discard the last page because I understand that I have reached the time limit. I am sorry to get exercised about this but it is like watching a slow-motion legislative car crash. I have not even had time to touch on a plethora of desperately worrying issues: the unfair repeat assessments for the long-term sick and disabled; the impact on foster carers and kinship carers; or the use of a private company, Unum insurance, which was found guilty in America of harassing and defrauding social security claimants.

Putting all that to one side, my final point is directly to the Minister. I am sure that he did not come into politics to disadvantage Britain's poorest kids, force people out of their homes, reduce the childcare support for hard-pushed parents or strike genuine fear and despair into the hearts of disabled people up and down the country—but that is what this Bill currently allows for and it is the legacy which the Minister risks. If safeguards are not forthcoming, social historians may look back on the history of the welfare state and pinpoint this Bill as the tipping point in the slide towards a feral state. I sincerely and genuinely hope that the Minister will take account of the grave concern in this Chamber and make significant changes to the Bill.