Housing Benefit

Bridget Phillipson Excerpts

Tuesday 9th November 2010 Commons Chamber

[Bridget Phillipson (Houghton and Sunderland South) (Lab)]

Let me begin by referring the House to my declaration in the Register of Members’ Financial Interests.

I am grateful to you, Mr Deputy Speaker, for calling me to speak in this important debate, and I am pleased to follow the hon. Member for Hastings and Rye (Amber Rudd), although I beg to differ with her interesting interpretation of the word “fairness”.

The Government’s £1.8 billion cuts in housing benefit will push the most vulnerable families in our society into poverty and debt. It has been estimated that up to 12,000 households in the north-east could be made homeless. The Government are using extreme examples to justify their wholesale swingeing cuts, but the simple truth is that most housing benefit recipients are low-income, hard-working families, pensioners, carers, and people with disabilities. The housing charity Shelter estimates that only one in eight housing benefit recipients is unemployed. We should not lose sight of the fact that housing benefit is also an in-work benefit. In fact, the average housing benefit award to private sector tenants in Sunderland is just £93 per week, and for social tenants it is even less: £69 per week.

What concerns me most is that the cuts in housing benefit will affect not only hard-working, low-income families, but pensioners. In Sunderland alone, more than 20,000 housing benefit recipients are over 60. Those people have contributed to society throughout their lives, but in return—when they need help from the state at the time when they are at their most vulnerable—their security is threatened, and they are treated as mere statistics.

[Steve Webb]

I am sure that the hon. Lady does not wish to alarm pensioners in her constituency. The figures that she has given relate to housing benefit, which applies overwhelmingly to social tenants who will not be affected by this change. Will she correct the record?

[Bridget Phillipson]

What I will say is that many older tenants will move into different tenancies at different points, and will be affected by the changes that the Government are introducing. Many older people will, at times, vacate social homes and move into the private sector as their needs require, and may be affected by the Government’s changes. The only alarm being caused is coming from the Government Benches. I hope that the Minister will think again about some of these measures.

The Chartered Institute of Housing summed things up best when it stated that the Government’s motive

“appears to be reducing expenditure with little co-ordination or regard for the purpose of the benefit itself.”

This is not a genuine attempt to reform housing benefit and introduce a better system in its place; this is a Treasury-driven hit on the poorest and most vulnerable in our society.

[Kwasi Kwarteng (Spelthorne) (Con)]

I am grateful to the hon. Lady for giving way. The House is unclear about Labour’s position on the cap. Labour Members have accepted that there is a need for public spending restraint, but Government Members want to know whether they think the cap is fair or not.

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[Bridget Phillipson]

I respectfully suggest to the hon. Gentleman that had he been here earlier, he would have heard some of the arguments articulated by my right hon. Friend the shadow Secretary of State. I also respectfully suggest that I am not referring to the cap. That is not the issue that I am discussing in relation to Sunderland; I am discussing the changes in respect of the 10% and the 30th percentile. That is my concern, and that is why this debate has to be on issues broader than London. I understand the concerns of my hon. Friends with London constituencies about the impact there, but the impact it will have in Sunderland will be different.

On average, claimants of local housing allowance in the north-east will see a cut of about 10% a week, or £468 a year, in what they receive. That will have a massive effect in the region, and in Sunderland it will affect more than 4,500 households. Furthermore, those out of work on jobseeker’s allowance for more than one year will be hit particularly hard, with a cut of 10% in their housing benefit. Currently, 2,500 of my constituents are claiming jobseeker’s allowance in an area of ongoing deprivation, where jobs are increasingly hard to come by. That will simply drive people into further poverty and drive up homelessness at a time when, no matter how hard people try, it is often difficult to find a job.

Sunderland city council prevented homelessness for 157 households in 2009-10, helping people to find accommodation, often in the private sector. Overall, the changes made in the comprehensive spending review will make it even harder for Sunderland city council to prevent homelessness. In the long term, the use of temporary bed-and-breakfast accommodation will inevitably drive up housing costs for local councils and have massive social consequences.

Changes in the calculation of housing benefit—pegging it to the consumer prices index—will lead to a dramatic rise in rent arrears, contributing to increased use of temporary accommodation and increased homelessness. It is not yet clear to me whether those who fall into arrears because of the cuts will be deemed to have made themselves intentionally homeless, which would mean that councils would not have a duty to house them. I would be grateful for some clarity from the Government on that issue.

Before I was elected, I managed a refuge for women and children fleeing domestic violence, and the city council supported these homeless families and got them rehoused, often in the private sector. The women would often pay a small top-up to their housing benefit, often to be near supportive family who could help with child care so that they could undertake training or return to the workplace. Such women will be doubly hit, and at the point when they are trying to get their lives back on track.

It is clear that the Government have failed to come up with an acceptable plan for housing benefit. They fail to recognise the long-term solutions to the underlying causes, and they are certainly not progressive.

[Jim Shannon (Strangford) (DUP)]

Does the hon. Lady agree that for a great many people the purpose of housing benefit is to get them out of low-income housing? The changes that the coalition Government are proposing will keep those people in poverty and low-income housing for the rest of their lives. That is my concern. Does the hon. Lady share it?

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[Bridget Phillipson]

I do. It is clear that the changes will have a huge impact not only in England, but in the hon. Gentleman’s constituency.

While more social homes need to be built, the coalition is cutting investment and scrapping regional housing targets. When people are crying out for help on unemployment, the coalition Government are set to cut 23,000 public sector jobs in the north-east alone. Until we tackle unemployment and until the Government bring forward a credible growth strategy, the housing benefit bill will not come down. In the north-east, the situation has not been helped by the scrapping of One North East and the lack of a regional industrial strategy.

Finally, when we need a system to stop unscrupulous private sector landlords from profiteering from the local housing allowance, the coalition Government do not even consider it. Instead, they focus their programme of cuts on the defenceless, the elderly and the least well off in our society. That cannot be allowed to happen. Labour Members all agree that there is a need to reform the current system of housing benefit—but not at such a cost, and not with the plan that the Government are implementing with such ill regard for the consequences.

I oppose these rushed, punitive and divisive measures. I will do what it takes to protect the low paid and the most vulnerable people across the country, who rely on housing benefit, and I encourage colleagues on both sides of the House to do so too.