Welfare Reform Bill

Baroness Lister of Burtersett Excerpts

Wednesday 14th December 2011 Lords Chamber

[Baroness Meacher]

My Lords, I support Amendment 19. I have particular concerns. I fully endorse the point made by the noble Baroness, Lady Hollis, that when people lose their job it is unacceptable for them immediately to face not only the shock of being unemployed and the dramatic fall in their incomes but the prospect of having to move their home. Psychologists always say that it is important to avoid changing more than one of our three mainstays of security in any one year: employment, our main relationship and our home. The risks of mental health problems rise significantly if we do so, as the noble Baroness illustrated very well.

There is therefore a strong case for allowing newly unemployed people time to adjust before they have to think of moving home. Of course the hope would be that they would find work within that year and never have to move at all. I want to raise again a particular problem that to some degree would be assisted by the amendment. I raised this issue in my most helpful meeting with the Minister but have reason to believe that his assurances would not work as he thinks they would. The issue is that of people with severe mental health problems who may be absolutely unable to move into shared accommodation, either because they themselves could not handle having someone else around or because the situation would be untenable if not downright dangerous for anyone else trying to live with them. The Minister assured me that discretionary housing payments should deal with this problem. Perhaps in theory this might be the case, but apparently in practice it does not in fact work. Does the Minister regard it as right for sick people to be penalised when for therapeutic reasons they cannot move into a living space with someone else?

I have a couple of examples to illustrate the point. A woman in her early 30s, living alone in private rented accommodation, receives ESA because of her mental health condition. She already has rent arrears as her housing benefit does not cover her rent. She applied for a discretionary housing payment but this has been refused. She has now been told that her housing benefit will be cut further, of course, in January 2012, when she is only entitled to the shared accommodation rate. She finds it difficult to cope with other people, and could not cope with a shared flat, even if she could find one. The adviser who is dealing with her fears that she could become homeless.

The other example is of a woman in her early thirties with HIV and related health difficulties, including depression. She is regarded as being unlikely to receive a discretionary housing payment until she is 35. I do not know why, but that is what I am told. She comes from a traumatic background, needs regular access to her many medications, and to the bathroom. She is not regarded as someone who could cope with shared accommodation: again, a likely homeless person.

If these claimants finish up on the streets, they will no doubt end up on one of our hospital wards at a cost of £261 per day, £95,000 per year to the taxpayer. I realise that this is a cost to the Department of Health, and not to the DWP, but I know the Minister is broad-minded on such matters and will not want to cause a massive increase in Department of Health costs. I am serious about it. There might be a saving to the DWP, but a much bigger cost in the Department of Health. However, the noble Baroness, Lady Hollis, does not accept at all that there would even be a cost saving in the DWP. There would therefore be a double whammy. We already see people moving automatically from benefits, to losing benefits, then on to the streets, and then into hospital. That is the way the system works, and this measure will simply make matters worse.

Apart from the inappropriateness of shared accommodation for some, though not at all every mentally ill person, there is also the practicality of finding such accommodation for this particular group. Someone with a mental health problem is going to be the last person many people want to share with. We know that the stigma involved is considerable. People are frightened, and they assume that people are dangerous when in fact they are not at all. But also, in reality, some people have difficult personal assumptions which would make them quite difficult to live with.

The result is that these people will not find shared accommodation readily, even if they could cope with it, and many absolutely could not. I know many people on our wards whom we could not discharge into shared accommodation. They would simply sit around on the wards, and it would be a problem.

I have focused on a particular claimant group, but an important one, in view of the numbers of these people. I hope the Minister will be sympathetic to the amendment, for all the reasons the noble Baroness, Lady Hollis, pointed out, but also because it would ameliorate the problem of this particular group of people with mental health problems who, with any luck, might over a year settle down rather further and then might be able to be accommodated within the system.

[Baroness Lister of Burtersett]

My Lords, I support the amendment tabled by my noble friend Lady Hollis of Heigham. She has painted a vivid and powerful picture of what this means for the people affected. I have sat through and participated in a couple of debates already about this, partly on the regulations, in Grand Committee. The more I have listened and read the evidence, the more uncomfortable I feel about us allowing this measure to go ahead.

When I was younger, I flat-shared. I answered the ads in Time Out, and it is a very different thing. I am sure that many noble Lords may have been in that position, and think there is nothing wrong in sharing accommodation. But doing it from choice is very different from being pushed into it. As my noble friend has spelt out, we are talking about less salubrious accommodation.

I am concerned about various groups who are particularly vulnerable here, as we have already heard. When the Social Security Advisory Committee considered this, it talked in particular about the way women will be affected. Women are not disproportionately affected as a group, but those who will be affected could be particularly adversely so.

There are two groups in particular. Pregnant single women, the advisory committee said, will be restricted to the shared accommodation rate until they give birth. They face one of three undesirable situations. They can move home twice, at a time when they may be financially, emotionally and physically ill-equipped to do so, into shared accommodation, and then back to self-contained accommodation when the baby is born; they can decide to move into shared accommodation and remain there after the birth of their child; or they can try to make up the shortfall in their rent.

--- Later in debate ---

[Baroness Hollis of Heigham]

My Lords, I would prefer housing benefit to be part of UC and to be paid to the tenant, because I think that that strengthens UC and makes it easier for one simple calculation to be made for the family. However, I support the amendment because, until the Government have rock-solid arrangements in place to ensure that the rent element in UC is immediately paid to the landlord, both tenant and landlord will, as the noble Lord, Lord Best, said, suffer.

Why would the tenant suffer? He may have to pay transaction costs. If it is looped through his bank account and there are any outstanding overdrafts, debts, or whatever, his UC, including the housing element, will be top-sliced. That is when there is no temptation to spend it on other things. I checked with my housing association. Even with direct debits from tenants in work, those direct debits go astray—deliberately or otherwise—and intensive work has to be done in housing management to reconstruct them again. Tenants can risk losing their home if rent payments are not made automatically to their landlord. For some tenants, that will be a real struggle. If tenants wish to have their rent paid directly to their landlord, but that choice is being denied them, they will suffer.

Why will the landlord suffer? Arrears will undoubtedly arise. I have doubled the amount in my housing association accounts because of potential arrears that I suspect will follow from this change, as have other housing associations. We will then also have to increase staff resources to try to collect those arrears. Private landlords, already reluctant to take DWP tenants, will certainly refuse. One reason for extending direct payments in the first place was to make it a more attractive option for landlords in the private sector, who have been notoriously reluctant since the 1950s to make accommodation available. They used to say, “No Irish, no blacks, no DSS, no dogs”. Versions of that scrutiny, that winnowing out, I fear regrettably still apply.

Ultimately, landlords may need to face evicting tenants. As many of those who cannot manage their money will be vulnerable, they may or may not be regarded as intentionally homeless. If they have children, they are a real problem for all parties, including social services.

Furthermore, housing associations, including mine, are seeking to raise money from private sources, from banks—even, we hope, from pension funds, which is under negotiation at the moment—for building programmes. Our asset is the security of our rent roll. If tenants instead have money paid to them which is not rock-solidly paid immediately to the housing association or the local authority, that rock-solid asset base will no longer be as valued. We estimate that the proposal will cost us something like 50 base points extra on all the loans we raise. We become a worse risk and, as a result, fewer homes will be built. An amendment putting the decision in the hands of not the DWP or landlords but in the hands of tenants is surely the right way forward.

[Baroness Lister of Burtersett]

My Lords, I shall speak briefly in support of the amendment moved by the noble Lord, Lord Best, from a slightly different perspective, and repeat what I said in Grand Committee. In Grand Committee, I congratulated the Government on their research, Perceptions on Welfare Reform and Universal Credit, which sounded out various stakeholders about what they thought about some of the reforms. One thing that came from that from people who will be affected was that although they welcomed the one-stop shop approach of universal credit—to the extent that it is a one-stop shop—there were real fears about putting all the eggs in one basket. If all the money goes together in one lump sum, if anything goes wrong, people are left insecure—high and dry. If some of the rent payment is going to the landlord, where the tenant wishes it, that is mitigated. That is why that choice should remain

Not expressed in this research but by a number of outside organisations is the worry about what happens to the money in the family. I know that the Minister argues that budgeting accounts will sort this out. I hope that they will, but I think that he knows that I am still slightly sceptical about the magical powers of the budgetary accounts. There are fears that the money may not be paid into the account of the person responsible for paying the rent and that they may not then have control over how the money is spent by their partner. That is a slightly different perspective from that of the noble Lord, Lord Best, who understandably and powerfully is relaying some of the concerns about housing providers, but we have to think about the extra burden that this might be placing on some families.

[Lord Cormack]

My Lords, the noble Lord, Lord Best, has made a powerful case. He made it very gently but forcefully. I was also struck by what the noble Baroness, Lady Howe of Idlicote, said. As one who held MPs’ surgeries for about 40 years and saw people come in who were often in considerable distress, I know that it is not just the feckless who get into financial trouble. Many decent people get into financial trouble. The ability to say that this money should go direct to the landlord could be of enormous help to someone who suddenly has a sick child and feels that they must spend the money on that child. If the money has gone to the landlord, the landlord is secure and the tenant is secure. That must surely be wholly desirable.

Those of us who have been constituency Members of Parliament know how difficult it is to persuade private landlords to consider tenants in this general category. We need an abundant supply of privately rented accommodation. Anything that may detract from that is to be regretted.

I admire my noble friend, because he is thoroughly the master of his brief and because his underlying aim, which is to create a more responsible society, is one to which we can, surely, all subscribe, but there are exceptions and times when it is right to give a choice.

Another point, which the noble Baroness, Lady Howe of Idlicote, made, struck a chord with me. There are many elderly people in receipt of benefit who get confused. I am not talking about people who suffer from dementia, but we all know—the noble Lord, Lord McAvoy, knows from his constituency experience—that elderly people sometimes get confused. They think, very genuinely, that they have paid something when they have not. It would be a great blessing to give those people that choice.

I would urge my noble friend the Minister to give very careful thought to this. I hope that the House will not divide on it tonight, but I hope that he will be able to give some thought perhaps even to putting down an appropriate amendment at Third Reading.