Housing Benefit

Caroline Lucas Excerpts

Tuesday 13th July 2010 Westminster Hall

[Mr Heald]

I will give way in a moment, but first I wish to mention Blackpool. The effect of the local broad rental market area, which takes in surrounding areas such as Fylde, has been to put up all the rents in the centre of Blackpool. There are other examples, including one in yesterday’s Evening Standard showing that housing benefit rents are higher than ordinary rents. The National Landlords Association states that the effect of the change will be landlords looking at their profit and loss and deciding by how much they can afford to reduce their rents. The fact is that housing benefit and the rental market are intertwined and it is ridiculous to say otherwise.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Does the hon. Gentleman agree that those on the lowest incomes pay most in income tax, as a percentage of their income, rather than those on higher incomes? The idea that these measures are somehow unfair to taxpayers is completely misguided.

[Mr Heald]

The hon. Lady makes my point exactly. If someone with a job that does not pay much is struggling and paying taxes, how will they feel to see a family renting at £2,000 per week?

--- Later in debate ---

[Caroline Lucas (Brighton, Pavilion) (Green)]

I congratulate the hon. Member for Hackney South and Shoreditch (Meg Hillier) on securing the debate.

The Government’s housing benefit proposals demonstrate beyond doubt that they are intent on pursuing plans that overwhelmingly penalise the poor—forget any nice words about our being in this together. As many housing charities predict, the proposals will make thousands of people homeless, as cuts to housing benefit combine with increased repossessions and higher unemployment. It is an absolute scandal that that should happen in one of the richest countries in the world in the 21st century—what a damning judgment on what was supposed to be a new politics.

I am deeply concerned about the impact in my constituency. We have heard a lot about London, and understandably so, but I reiterate that many areas, particularly beyond London’s periphery, are also suffering a huge amount. In Brighton, Pavilion, for example, someone would have to earn more than £50,000 a year to buy an average-priced house. No wonder that nearly 10,000 households are on the waiting list for affordable housing in the Brighton and Hove area. At current rates, that list will take more than eight years to clear.

The increase in housing benefit bills over recent years is not, as the Government would have us believe, the result of some epidemic of scroungers, but, as others have said, of the considerable growth in the number of people who are being forced into the private rented sector, where rents are almost double those in social housing. Again in my own constituency, the private rented sector makes up about 21% of the housing sector, which is much higher than average. My surgeries are full of people who are already struggling to pay rent and to find alternatives to cramped, overcrowded and overpriced accommodation, and the Government’s plans can only make that worse.

If we are to reduce the housing benefit bill in the long term, we should be building more affordable housing, which should, of course, be green, decent and fuel-efficient housing. We need a reduction in VAT on repairs to encourage people to put older properties to better use and we need to support people in bringing empty properties into use. We also need to support housing co-ops and other forms of affordable housing.

In the meantime, however, the Government’s proposals will simply make the situation worse. Particularly pernicious are the proposals to reduce the percentile of local market rents used to calculate LHA from the median to the 30th percentile and to cap the maximum LHA payable for each property size. Those reforms will lead to a significant reduction in the amount of LHA received by every claimant, exacerbating widespread problems with rent shortfalls and increasing barriers to accessing accommodation. As a result, swathes of London and the south-east will simply become unaffordable for people on LHA, which is likely to push them into debt, eviction and homelessness. Behind the statistics, it is important to remember the individual families many of us see in our surgeries, whose hopes and aspirations are being wrecked every day. The Government’s proposals will simply make things worse.

We are short of time, so I will make one final point. The hon. Member for East Hampshire (Damian Hinds) talked about increasing discretionary housing payments, or the DHP budget, as an additional safety net to support the thousands of claimants who will face shortfalls once the cuts to LHA are introduced. Let us remember, however, that the Chartered Institute of Housing has undertaken analysis showing that if the additional £40 million is spent solely on making up the shortfall in rents due to the proposed drop, it will support just 4% of the claimants facing the drop from the 50th to the 30th percentile for a year.

If that were not enough, from April 2013, receipt of full housing benefit for claimants who can be expected to look for work will be time limited to 12 months and then reduced by 10%. Attaching sanctions to housing benefit is an extremely unfair way of trying to help into work claimants who could work. Indeed, after the Budget, I have to ask where the jobs are that we expect these people to find. In the context of rising unemployment, it is hugely unjust to penalise people who cannot find work, and the Government’s proposals will simply lead to an even greater increase in poverty.

Let me finish with some questions. What kind of transitional protection measures will be in place for the people affected by the Government’s proposals? Have the Government considered the knock-on costs for local authorities and the knock-on effects on the private rented sector? Finally, to reiterate an earlier point, what is the point of an impact assessment that is produced after the proposals?

[Mr Mike Hancock (in the Chair)]

Thank you very much. Before I call the last Back-Bench speaker, I apologise to everyone who wanted to speak but whom I could not get in. The last speaker is Emily Thornberry. It would be helpful, Emily, if you could remember that we have given an undertaking to start the winding-up speeches at 12.10 pm.