Housing Benefit

Bob Blackman Excerpts

Tuesday 9th November 2010 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

Thank you, Mr Deputy Speaker, and I think I am right in also wishing you a happy birthday for tomorrow. I also wish to say that it is a privilege and an honour to follow the hon. Member for Hampstead and Kilburn (Glenda Jackson).

We cannot divorce housing benefit from the plethora of other benefits that have been allowed to build up over the last 13 years: jobseeker’s allowance, employment and support allowance, income support, and also council tax benefit, child tax credit and working tax credit. Contributory benefits and universal benefits will all play a part in resolving this country’s benefits problem.

These benefits are a bureaucratic nightmare. They are mainly paper based, and enormous amounts of evidence are required to justify their application. As a consequence, many individuals who claim benefits have to go to Jobcentre Plus, the pensions authority, the disability and carers service, their local authority and Her Majesty’s Revenue and Customs. If they are on jobseeker’s allowance they may have to swap between that and incapacity benefit, claiming the money from the same agency yet having to claim again. Clearly therefore, what we have inherited will be a nightmare to resolve. Housing benefits impinge on all those other benefits, and I have said before that housing benefit is a very bad benefit, because it is so complicated to administer.

Let us look at what has happened over the last 10 years. I will not repeat the figures for the increase in the total budget, but we should note that it costs £1 billion to administer that budget. For most local authorities in the country it is the biggest single item of expenditure going through their books. We are using it as a form of housing subsidy. That is right and justified, but the extent to which the costs have built up and been allowed to spiral is completely wrong. The one thing I agree with the Opposition about is the need to reform housing benefit, yet for 13 years they ran this country but did not reform it. Instead they made it worse. Now we have inherited that situation and we, as the new Government, must deal with it.

What must we do to reform it? First, we must look at the costs involved in housing benefits. As we have said, this is the first stage in simplifying the country’s benefit system, making it more effective, reasonable and transparent, and changing it into a system that encourages people to go to work. In my constituency people frequently say to me, “I can’t get a house for love nor money.” The advice given to them by the local authority is, “We can’t provide you with a council house, but what we can do is this: you go into private sector rental accommodation, and housing benefit will pay for it.” If people in that situation follow that advice but then have the temerity to get a job, they lose housing benefit pound for pound, which is, of course, an immediate disincentive to getting a job. What we have to do is make sure that any reform of the whole housing benefit regime transforms it so that work always pays.

[Ms Buck]

I am asking this for about the fourth time this evening. Does the hon. Gentleman concede that half of all local housing allowance claimants of working age in private rented accommodation are either in work or connected to the labour market through jobseeker’s allowance?

[Bob Blackman]

I will repeat the mantra that my hon. Friends have repeated, which is that 13% are in work and the rest are on JSA. The LHA has distorted the market even more, as my hon. Friends have said, by making it more beneficial in certain instances for people to be on housing benefit and pocket the difference. What nonsense! Rent levels have been distorted in many parts of the country.

The Opposition are claiming that the modest reforms being introduced will mean people being thrown out of their houses and suddenly being cleansed out of all proportion, but what will happen is exactly what is happening in the borough of which my constituency is a part. Its housing director has said that 3,040 families will be affected by the change, and the borough will seek to ensure that the rents fall and adjust to the levels of housing benefit that are applicable—although that still distorts the housing market. Some 3,000 properties out of more than 100,000 in the borough will be affected, so this involves a small percentage of people.

When I challenged the housing director to tell me what he would do about the families who might, sadly, lose their houses as a result of this change, the figure came down from 3,040 to 80. I have great sympathy for the 80 families who could be in that position, so I then challenged the housing director to tell me what he would do about it. My authority will do what every local authority in this country should do, which is challenge the landlords to reduce their rents so that those people are not made homeless.

[Phil Wilson]

How can the hon. Gentleman expect private landlords to reduce their rents when for every one person on LHA wanting a property, five to 10 people in work are looking for the same property? Who are private landlords going to go for? They are going to go for the person in work.

[Bob Blackman]

I thank the hon. Gentleman for his intervention, which leads on to the other key issue in this debate: the supply of housing in this country. That point is not really being answered by the Opposition. The Labour party had every opportunity to build houses over the past 13 years, but it failed to do so. At the same time, it failed to take account of the fact that this country’s population is increasing, so the need for housing increases all the time. We have a market for housing and housing benefit distorts it directly, which is why it is a bad benefit in desperate need of reform. One of the reforms that must take place is a change to the way in which housing benefit is withdrawn from people as they get work. At the moment that is a direct disincentive for people at a certain level to work, because they lose benefit pound for pound. Why should someone work if that is the position?

[Fiona O'Donnell]

Does the hon. Gentleman not realise that what this means for housing associations, on which we are going to rely to build homes, is that their cash flow will be interrupted, they will have debts and there will be an adverse impact on their ability to borrow to build those homes?

[Bob Blackman]

I thank the hon. Lady for her intervention. The housing associations throughout this country seek changes of tenure, changes of regime and an encouragement to develop the housing that this country desperately needs in every local authority area. I trust that that is what will happen. The coalition Government have set out their stall: we will build 150,000 new homes during the life of this Government. We agree that that is not enough, and we would like to see more. What we want to see is young people getting a foot on the housing ladder, moving out of rented accommodation and purchasing their own property. What has to change is that the applicable lending regimes of the banks, building societies and suchlike must enable people to get on the property ladder.

[Rosie Cooper (West Lancashire) (Lab)]

Will the hon. Gentleman comment on my local authority, West Lancashire borough council? It wanted to build a new civic centre, and in so doing said that it would build affordable houses and in the process knock down four good homes. While he is speaking about that—

[Mr Deputy Speaker (Mr Nigel Evans)]

Order. I call Bob Blackman, who has four seconds left.

[Bob Blackman]

Very simply, I welcome its proposition—

[Mr Deputy Speaker]

Order.