Under-occupancy Penalty

Clive Betts Excerpts

Thursday 28th January 2016 Commons Chamber

[Justin Tomlinson]

I thank my hon. Friend for that. That is why it is so important that we are increasing housing starts. Landlords are already changing the way in which they bring new housing stock on, which is welcome news.

[Mr Clive Betts (Sheffield South East) (Lab)]

Have the Government effectively abandoned the principle of a benefits system that properly assesses people according to their needs and circumstances and pays them a benefit while those circumstances last? The answer to everything seems to be discretionary housing payments. They are discretionary, they are paid on a case-by-case basis, 75% of people paying the bedroom tax do not get them and they are time-limited. Does the Minister recognise the enormous uncertainty that that creates, and the hardship for people in very real housing need?

Housing Benefit and Supported Housing

Clive Betts Excerpts

Wednesday 27th January 2016 Commons Chamber

[John Healey]

I thank my hon. Friend and applaud his effort to talk to providers in his constituency. The fears that Framework expressed are widely voiced and shared by providers who offer that type of housing and support. I do not know what figures he has for Nottingham, but Homeless Link cites figures in Birmingham that expose the shortfall. The average national rent in a homeless hostel is about £180 per week. The local housing allowance rate in Birmingham is half that figure, at £98.87 a week. The local housing allowance rate for a room in a shared house, which is all that single people under 35 are entitled to, is just £57.34 a week—a shortfall of over £120 per week, per tenant.

Supported housing is not just an emergency bed or a roof over someone’s head; the support helps people to get their lives back together. Last year, 1,500—or two in five—people housed by St Mungo’s in its hostels moved on from supported housing into individual accommodation. Last year, St Vincent’s—the Manchester-based housing charity—saw 15 of its young Foyer residents go on to university, one to Oxford. For thousands of other people with severe autism, learning disabilities, dementia and mental illness, living as independently as possible in supported housing, there is no alternative but hospital and residential care, which are much more institutionalised for the residents and much more expensive for the taxpayer. This policy risks turning the clock back on people’s lives and standards of care by 40 years.

[Mr Clive Betts (Sheffield South East) (Lab)]

My right hon. Friend has illustrated his case by referring to people for whom the alternative may be much more expensive and less adequate care. There are other people, such as women fleeing domestic violence with their children, who come to very good accommodation in my constituency, who will have no alternative at all if those places are closed down as a result of these measures.

[John Healey]

My hon. Friend, who chairs the Select Committee on Communities and Local Government, understands this better perhaps than anyone in the House. There is no alternative to the supported housing needed by many of the most vulnerable people, and which they have at present. That is why Ministers must act immediately to exempt supported housing in full from the crude cuts and undertake a detailed consultation with providers about how such housing can be secured in future. Before Christmas, I revealed the scale of the problems facing people in specialist supported housing.

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[Brandon Lewis]

I give way to the Chair of the Communities and Local Government Committee.

[Mr Betts]

The Minister has rightly recognised the importance of supported and specialist housing. He has now just indicated that the Government will somehow protect people in these circumstances. Can he give any indication of how that will be done and when these measures will be announced, given that housing associations are already having to plan for potential change in 2018 that could lead to the closure of existing accommodation and to new accommodation not being built?

[Brandon Lewis]

The hon. Gentleman has effectively asked me to continue my speech, because I was just about to say, as I am sure he will appreciate, that the underlying principles are the bedrock of this policy formation. He, along with the right hon. Member for Wentworth and Dearne, urges the Government to note the concerns of supported housing providers, so let me reassure all Members of the House that we have of course been listening very carefully to those concerns, and we will continue to do so.

My ministerial colleagues and I have met representatives of the National Housing Federation and chief executives of housing associations that provide supported housing. We have listened very carefully to all these representations and noted everything that we have been told. We know that the costs of supported housing provision are higher than general needs housing and that providers rely on housing benefit funding for support elements such as wardens, security and the up-keep of communal facilities.

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[Mr Clive Betts (Sheffield South East) (Lab)]

We are here today for one of two reasons. Either the Government set out, as a matter of deliberate policy, to bring about the closure of specialist and supported housing—perhaps they are not bothered whether such housing units close—or this is an unintended consequence of a wider policy to change housing benefit that we have to deal with today because the Government did not do a proper impact assessment of the policy right at the beginning. We should have had an impact assessment before we began the process, rather than when concerns were rightly raised up and down the country about the potential impact. I welcome what the Minister has said today. It is right that a proper review will be carried out, and that the Government will not simply carry on with this policy and its potential consequences.

Government Members have said that there has been political point scoring and scaremongering by Opposition Members and the housing association movement. That is not true. When I am rung up by Tony Stacey, the chief executive of South Yorkshire Housing Association, who is widely respected by people on both sides of the House because of the work of his association and his personal commitment, and he says that the impact of these measures will be a £2.8 million reduction in the income of the association, out of a £20 million budget, that is a matter of major concern. That would lead to the closure of about 1,000 supported housing places and, because of the financial impact, the housing association would have to start acting on those closures within the next few months and would not be able to wait until 2018. That is not scaremongering; it is the financial reality for an association that has to balance its books over that period. That is why we are here debating the issue today.

Having welcomed what the Minister said, I have one or two questions. First, he talked about a review by the end of March. When is a conclusion likely to be reached to provide certainty for housing associations and others, including local councils, about the impact of these measures or the changed measures that I hope the Government will bring forward? In conducting the review and coming to a conclusion, will the Government talk not only to the National Housing Federation, which they must rightly talk to, but to the Local Government Association, because council schemes and voluntary schemes are also involved? Will the Minister ensure that all relevant parties are consulted? Will he indicate when conclusions will be reached so that there can be certainty?

Secondly, will the changes for new tenants that are due to be introduced in April 2016 now be postponed, or will new tenancies be created in 2016 on the basis of the changes proposed at present, before the review? I hope the Minister will say that no changes will be introduced, and that the full costs of supported housing will be covered through housing benefit for new tenancies from April 2016 until the review is concluded.

Finally, I also welcome what the Minister said about rent increases for supported housing—that the 1% reduction will not go ahead for next year, while the review is being undertaken. Does that mean that the changes in the Budget will not be implemented, that the 1% reduction will not now happen and that CPI plus 1% will be allowed for next year, or that rents will simply be frozen? There is quite a big difference for associations, because even the rent changes, without the housing benefit changes, have an impact on supported housing. Can we have clarification on that as well?

I welcome the direction of travel that the Government seem to be moving in now, back to a more realistic position. Perhaps the Communities and Local Government Committee will want to have a look at this as well. I hope the Minister will fully consult and take on board the real concerns that the housing association movement and local councils have raised about these measures. None of us wants to see supported housing units closed.

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[Justin Tomlinson]

For new tenants, the change comes into effect in 2016; for existing ones, it will come into effect in 2018. The delay on the 1% is just for supported housing, so I am afraid that I cannot give that commitment.

[Mr Betts]

The question is this: will the Minister defer the change in housing benefit related to LHA for supported housing from April this year so that it does not apply to new tenancies until the review has been completed?

[Justin Tomlinson]

The changes do not come into effect at that point. That is why we said that we will urgently take forward the review based on the points that have been raised.

I can assure Members that DWP and DCLG will work closely together to ensure that the appropriate protections are in place for those in supported housing.

[Mr Betts]

I am sorry, but the changes do come into effect for new tenancies in supported housing from April this year, so will the Minister please defer them?

[Justin Tomlinson]

I have made it clear that, for those in supported housing, the change will be delayed for a year as we conduct the urgent review.

On the rationale for changes in the social rented sector, we will stick to our principles of protecting the most vulnerable. However, these are important reforms. We inherited a burgeoning housing benefits bill that we had to get control of. We have started to do that, but we need to go further. The housing benefit bill for England has risen by over 20% during the past 10 years, as my hon. Friend the Member for Bexhill and Battle (Huw Merriman) said. Part of the reason is that the rises in social rents have outstripped those in the private sector, as highlighted by my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). Social rents are up by 60% compared with 23% in the private sector. In the private sector, the local housing allowance curbs the spiralling housing benefit bill, but there is no similar restraint in the social sector. That is why we are going to cap social sector rents in the same way as in the private sector, thereby reducing rents in the social sector. We should remember that this will help the one third of people in this sector who do not claim any housing benefit and whose rents will come down. However, we will continue to protect the most vulnerable.

This is just part of our wider housing reforms. We are improving access, creating more choice and building more affordable homes. We are doubling the housing budget to more than £20 billion over the next five years to help to ensure that housing is prioritised for those who need it most.

Budget Resolutions and Economic Situation

Clive Betts Excerpts

Thursday 9th July 2015 Commons Chamber

[Mr Duncan Smith]

Indeed. I shall shortly come to how these imbalances created disparities for people in work and trapped on low income.

We are sticking to two of our most important manifesto promises on personal tax. We are starting the journey to raise the tax-free personal allowance to £12,500 from next year. Once £12,500 is reached, as my right hon. Friend the Chancellor said, we will legislate so that the personal allowance always rises in line with the minimum wage—a great move to protect working people. We are keeping our commitment to raise the threshold at which people pay the higher 40p rate of tax to £50,000, starting with an increase to £43,000 from next year.

I consider one measure from yesterday’s Budget to be more significant than all the others—indeed, it is perhaps the most significant measure in all the Budgets that I have listened to during my many years in this House. The Government believe that if people work hard, they should be rewarded. In our growing economy, people should be able to expect a decent wage if they move into work and increase their hours. That is why, starting from April 2016, the Government have announced that we will move to a national living wage—set initially at £7.20, but rising to £9 by 2020. We will ask the Low Pay Commission to recommend future increases to the national living wage that achieve the Government’s objective of reaching 60% of median earnings by 2020. I believe that that is groundbreaking, and I hope that all Members of the House, instead of cavilling about it, will come to support it.

[Mr Clive Betts (Sheffield South East) (Lab)]

One of the lowest-paid sectors is the care sector, and it is right that it should get a pay increase. The Local Government Association has calculated that to pay the current living wage to all care workers who are directly employed by local authorities, and those employed by private firms that provide services to local authorities, would cost £0.75 billion. By 2020 that will rise to about £1.5 billion, or more. Will that be regarded as a new burden on local authorities for which the Treasury stands the cost, or will it be a further £1.5 billion cut to local authority services?

[Mr Duncan Smith]

We have the spending review to address such issues. In my Department here in London I took on contractors about paying the London living wage, and I faced exactly the same debates and arguments about how it was not feasible and how they would face high costs. I insisted that they went away and looked at their productivity. My Department in London instituted the London living wage. Not one job was lost and productivity has improved. I would consider the matter carefully before we take those official statements as the reality.

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[Pauline Latham]

My hon. Friend makes a very good point, and that is exactly what the Government are trying to escape from. They are trying to raise the tax threshold, so that more people keep more of the money that they have earned. That must be a good thing to do. We need to grow the economy and get the finances under control, with the national debt falling.

[Mr Clive]

(Sheffield South East) (Lab): The hon. Lady rightly talks about the need for honesty in politics. Obviously, she believes profoundly in what the Chancellor has proposed in his Budget. Why, then, was that not set out for the electorate to take a view on before the election? Why was it hidden away until after people voted?

[Pauline Latham]

As the hon. Gentleman knows, we did not know what the result of the election would be. We did not even know that we would be in government; we thought that we might be in a coalition. It might have been the Labour party in a coalition. We have now had a Budget that sets out extremely clearly for the electorate exactly what we will do over the next five years. We want to invest in business. We want to help businesses, so that they can employ more people. That has certainly happened in my constituency, as it will have done in his constituency and those of every hon. Member, because business has created so many jobs. The climate is right for business. Britain is open for business, and we need to get more people working hard.

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[Graham Evans (Weaver Vale) (Con)]

It is a great privilege to follow the hon. Member for Bradford South (Judith Cummins)—a fine constituency and a fine city. I am sure that she will do an excellent job as the constituency’s new MP. I also pay tribute to my hon. Friend the Member for North Warwickshire (Craig Tracey), an outstanding individual who will, I am sure, do a great job for his constituents. I also pay tribute to his good lady wife for her service to Queen and country.

At a time of uncertainty abroad—be it in Greece, Russia or the middle east—the Chancellor delivered a Budget that prized economic stability at home. It was a one nation Budget that will provide security for working people in Weaver Vale, greater Cheshire and the north-west as a whole. Despite the chaos in the eurozone, Britain is still growing faster than any other major advanced economy in the world—faster than America and Germany. Our economy grew by 3% last year, a figure revised upwards from the 2.6% we expected in March. Our long-term economic plan is working. Indeed, before the election, the US President commented that the UK must be doing something right on its economy.

British businesses, backed by the Government through tax cuts and the removal of red tape, have created 2 million new jobs since 2010. I know that businesses across Weaver Vale welcomed the announcements made by the Chancellor yesterday about the extension of the employment allowance to £3,000 and the news that corporation tax will fall to 18% in 2020—from the 28% we inherited five years ago.

Earlier, the shadow Chancellor said that science and technology were not mentioned in the Budget, but the Chancellor has a fine record on such investment, including in Sci-Tech at Daresbury. The previous Labour Government took investment away from Daresbury, and when I became MP for the area in 2010 I was advised by the then Chairman of the Science and Technology Committee—he is no longer a Member, but he was a fine Chairman and I pay tribute to him—to watch like a hawk to ensure that the new Government did not take away investment from Daresbury as the previous Government had done. Instead, the Chancellor invested £150 million recently in big data, and I was proud that, just before the election, IBM signed a £130 million partnership with the Science and Technology Facilities Council that will secure high growth and high-tech, well-paid jobs for my constituents in the long term. That is good for my constituency and for the country, as we become an international hub for science and technology and big data.

The OBR has predicted that a further 1 million jobs will be created over the next five years, but we are the party of ambition and we want to go further. We are working towards a target of full employment—a job for everyone who wants one and a country that is open for business. In the past five years, Government-backed schemes such as the right to buy have helped 200,000 people on to the property ladder. That is vital, because home ownership is central to the aspirational country that we are building. Owning their own home means so much more to families. I was born in a council house, the youngest of four children. My family lived there for 20 years and, in 1972, Ted Heath’s Conservative Government offered us the opportunity to purchase the property, so my parents did so. My father died when I was a teenager and my mother had security in old age and retirement because they had invested in that house. The right to buy is central to the Conservative party’s philosophy that everyone should have a home of their own.

Yesterday, my right hon. Friend the Chancellor gave Britain a pay rise. Over the course of the Parliament, the introduction of the national living wage could be worth more than £5,000 to someone working full time for the minimum wage. I need not tell the House how much that extra income will mean to hard-working families trying to get on. Not only will working people earn more, they will keep more of what they earn. Typical taxpayers will pay £905 less tax than in 2010, thanks to the increases in the personal allowance over the last five years.

[Mr Betts]

I do not know whether the hon. Gentleman has seen the analysis from the Institute for Fiscal Studies today, but it says that the minimum wage announcement will not go anywhere near compensating for welfare cuts in cash terms. People currently on tax credits will be significantly worse off and the reform could cost 3 million families an average of £5,000 a year. That is the IFS’s calculation.

[Graham Evans]

I have to confess that I have not seen those figures, but the Government’s overall mantra is “A higher wage, lower tax, lower welfare economy”, which will benefit all of our constituents. That is in contrast to the Labour party, which had a high-tax, low-wage, high-benefit culture. That is the debate we are having today: the Conservatives want high wages and low benefits and I believe that the Budget will move Britain in that direction. That will be good for the country, for my children and for our country’s future. We are a beacon in Europe, as its second biggest economy, and if we continue down the same road, in 10 to 15 years we will become the biggest economy in Europe. The whole world is watching this great country, and we are the beacon for how things can be done in difficult economic circumstances.

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[Mr Clive Betts (Sheffield South East) (Lab)]

I pay tribute to those who have made maiden speeches. The hon. Member for Caithness, Sutherland and Easter Ross (Dr Monaghan) spoke passionately about inequality and the disadvantaged. I think many of us will share those sentiments. I have been to his constituency and it is very beautiful. I am pleased that I can still go there on holiday without having to go abroad. The hon. Gentleman was generous to his predecessor. John Thurso chaired the Finance and Services Committee in this House and did an excellent job of putting the internal finances of this House into good shape. He should be congratulated on that. My hon. Friend the Member for Bradford South (Judith Cummins) mentioned her predecessor, Gerry Sutcliffe. I would have to say, with a bit of tongue-in-cheek, that Gerry has certainly left a big hole in the defence of the parliamentary football team, but I will move on.

The Budget has certainly received big headlines, but I will try to focus on one or two details that probably do not make quite such good reading for Government Members. The Chancellor is coming back in the autumn with his forecast for cuts to departmental spending. Local authorities in the previous Parliament had £10 billion of the £27 billion of Government grant cut—nearly 40%. That has disproportionately affected poorer authorities in the north. The forecast is for another £9.5 billion of cuts in this Parliament on top of that. Local authorities have done very well to be as efficient and effective as possible with the spending they are left with. They simply cannot carry on delivering the services that our constituents want from them if those £9.5 billion cuts follow on from the cuts in the previous Parliament. Why has local government been disproportionately singled out for cuts compared with other services? That is the question the Government have to answer.

There are two areas where I think there is a particular problem. I support the principle of the Government’s devolution proposals if they are not simply a mechanism for passing on more cuts for local authorities to deliver. We have to have some concerns about that. I would say, however, that, given that they are primarily about trying to rebalance the economy and with the talk of the northern powerhouse, we should look at what has happened to local authority spending on planning and economic activity. Local Government Association figures show a massive 55.4% cut in spending on planning and economic development in high-cut authorities in the last five years, and even in medium-cut authorities that figure is 47%. Those sorts of figures will not support the economic regeneration and development in the north that the Government and everybody else want, which is a matter of particular concern.

We have a real problem in social care. The NHS has had some protection, but 300,000 fewer elderly people are getting social care from local authorities now than in 2010, because authorities now offer it only to those in the greatest need. Age UK says that more than 1 million people needing care are not getting it, which puts pressure on the NHS and accident and emergency units and results in beds being occupied by people who should be in their own homes being properly looked after; and this year, there will be a further cut of more than £1 billion to those services.

We cannot carry on like this. If we are going to have proper joined-up health and social care, social care needs some protection as well. I raised this point with the Secretary of State. Social care has some of the lowest paid employees of any sector in local government or any other service. If the living wage is applied at £9 per hour to everyone in the social care sector, it will cost local authorities about £1.5 billion by 2020. Local authorities cannot find that money on top of the cuts they have to make anyway. They simply cannot do it. This is an added burden that the Treasury must bear by giving that money back to local authorities. Instead of showing in the Red Book, as it does, a £1.5 billion saving in the welfare budget, the Treasury has to give this money back to local authorities to compensate them—and that does not include the cost of paying other workers in a similar way.

I hoped the Budget would boost house building in this country, but let us look at the hidden effects. The cap on local authority borrowing has not been lifted, but the rents that housing associations and local authorities can charge have been reduced from the commitment by the previous Housing Minister, the hon. Member for Hertford and Stortford (Mr Prisk), who promised rent increases of CPI plus 1% over 10 years, to a 1% reduction per year. The Chancellor said yesterday that it would come from efficiency savings. No, it will not. Housing associations and local authorities cannot cover 4% a year less in rents through efficiency savings. The LGA has said that it will reduce the ability of local authorities and housing associations to invest in new homes and improve existing ones, while the National Housing Federation said today that, on a conservative estimate, it would reduce the amount of money available for development by £3.9 billion and mean 27,000 fewer social homes being built. That did not appear in any of the Budget headlines. I repeat, some 27,000 fewer social houses will be built because of the Budget and there will be a £50 million loss to the housing account in my own city of Sheffield. Those are figures that the Chancellor did not crow about yesterday, but they are there in the bottom lines of the Red Book.

There are additional problems, particularly for housing associations and local authorities, arising from the impact of welfare reforms, rising rent arrears, extra collection costs and the uncertainty of the right to buy scheme. These are all issues that will affect the ability of associations to borrow more money. They have already borrowed on the strength of the forecast rent increases, and now those increases have been taken away from them. No one can run a business like that, with the Government constantly chopping and changing the forecast revenue streams.

There is this idea of extra rents for higher-paid social housing tenants. Outside London, I think it is £30,000 a year. That is not particularly high pay for a family. Why should families who have been social housing tenants for years and have suddenly started earning £30,000 be penalised? It does not happen to owner-occupiers. What sort of system will be set up to do this? Will local authorities and housing associations have to means-test their tenants to identify those who earn more than £30,000 a year? Otherwise, how are we going to do it? When someone starts to earn £30,000, will their rent suddenly jump up overnight, or will there be a system of tapers? It is just another system where, as people earn more, the state takes more back. How does that make work pay? How is it consistent with the rest of the Budget? There are some questions that the Government simply have to answer.

Does the rent increase apply to supported housing with care? Housing association and local authority arrangements mean that wages form about 80% of the cost of those packages and it is not possible to get out of them. If the rent revenue to fund them suddenly drops, those care supported packages and that particular sort of specialist accommodation will no longer be viable. Have the Government thought that through or will they exempt rents in care and supported-package housing?

Finally, I want to address the issue of 18 to 21-year-olds not having an automatic entitlement to housing benefit. A lot of these people are very vulnerable indeed. The Albert Kennedy Trust told me the other day that 24% of people who go to Crisis and Centrepoint are from the lesbian, gay, bisexual, and transgender community. They are often very frightened and very worried. They have probably just come out to their parents and are frightened to go home because they are not welcome there. Are they now going to be excluded from entitlement to housing benefit? What will the exceptions be? How will the Government set them down, and will they consult on them so that they are actually meaningful?

A lot of the detail in the Budget did not come out in yesterday’s headlines. I am really worried about the effect of the impact of cuts on local authorities—will the Government fund the living wage?—and about the impact on the development of badly needed social housing, which will be drastically cut by the Budget.

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[The Economic Secretary to the Treasury (Harriett Baldwin)]

This has been a lively debate on a summer Budget that puts the country’s security first—economic security, national security and financial security for the record numbers of people in this country who are now working, including the 2 million who have joined the workforce since 2010. It is a Budget that continues to carry Britain toward a secure, prosperous future by backing the aspirations of working people at every stage of their lives.

For too long, we have been a low-wage, high-tax, high-welfare society—one that took money away from the poorest in taxes, then gave it back to them in the form of tax credits and welfare. In this Budget, we are changing that around. We are setting out to build a high-wage, low-tax, low-welfare economy: an economy in which work always pays and working more always pays more; an economy in which working households are supported through higher wages and lower taxes, not subsidised through a tax credits system that even Labour Members have described as simply not sustainable; an economy that gives 2.5 million people—those on the lowest pay today—a 10% direct pay rise and establishes a living wage that could, at this Parliament’s end, exceed £9 an hour.

[Mr Betts]

How does the hon. Lady deal with the comments from the IFS? Does she dismiss them, or is she saying that the IFS is absolutely wrong to say that, as a result of a small increase in their wages but a bigger cut in their tax credits, 3 million people will be £5,000 a year worse off? Does she disagree with that figure or, if she accepts it, how does she justify it?

[Harriett Baldwin]

The IFS figures do not include, for example, the full impact of the increased offer of free childcare. According to the Treasury figures, eight out of 10 working households will be better off as a result of the changes, acting in combination, by 2017.

As a country, we have 1% of the world’s population, we produce 4% of global GDP, and we are responsible for 7% of the world’s welfare payments. That is not right, it is not sustainable and it needs to be reformed. In introducing the reforms, we have set out four principles. The first is protecting the most vulnerable—that is fundamental. It is why we will honour our commitments to uprate the state pension according to the triple lock; we will neither means-test nor tax disability benefits—in fact, all disability benefits are exempt from the four-year freeze of working-age benefits—and we will increase funding for domestic abuse victims and for women’s refuge centres.

The second principle is to expect those who can work to look for work and to take work when it is offered, because work is the best route out of poverty. The third principle is to place the entire welfare system on an affordable and sustainable footing, fulfilling our commitment to run a budget surplus, because that is the best route to long-term economic security.

Oral Answers to Questions

Clive Betts Excerpts

Monday 22nd June 2015 Commons Chamber

[Mr Duncan Smith]

We are looking at welfare, and at how to reform it. When we are ready, I will come forward with an announcement. Let me take the right hon. Gentleman back to the issue of tax credits. We have had many Labour Members going on about tax credits. I looked up how tax credits were increased under a Labour Government. Interestingly, it appears that just before every election, the Labour Government dramatically increased tax credits—in 2004 by 60%; in 2005, just before the election, by 7.2%; and in 2010, just before the election, by 14.4% and by 8.5%. The truth is that his Government have always used benefits as a way of trying to buy votes. We believe that benefits are about supporting people to do the right thing, to get back to work, and to live a more prosperous life.

[Mr Clive Betts (Sheffield South East) (Lab)]

11. What consultation his Department has undertaken with social landlords on the potential effects of the introduction of universal credit and the benefit cap on direct rent payments to landlords.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I instituted a phased roll-out of universal credit, so we would have time to consider any issues that arose and to deal with them. Jobcentre Plus and local authorities are working together with “Universal Support—delivered locally”. We will continue to develop this important partnership to ensure the most vulnerable get the support they need to lead independent lives. We have done a huge number of reviews. We regularly engage with more than 50 landlords across all sectors, which includes meeting social landlords in key areas where universal credit is live.

[Mr Betts]

This issue was raised by Tony Stacey, the chief executive of South Yorkshire Housing Association. Currently, if a household is in rent arrears and gets housing benefit, the benefit can be paid directly to the social landlord. When universal credit is introduced, if the family also gets a welfare cap, it is the housing cost element that is squeezed by the cap. No longer will the universal credit be paid directly to the social landlord to cover the rent. Can the Secretary of State not see that that could lead to a rise in evictions? Is he aware of the problem, and what will he do about it?

Oral Answers to Questions

Clive Betts Excerpts

Monday 26th January 2015 Commons Chamber

[Mr Duncan Smith]

Yes; changing that situation is something that the coalition has set out to achieve. I remind my hon. Friend that when we came to power, the last Government had pretty much left an open door for access to benefits. People were able to claim jobseeker’s allowance pretty much on arrival. There was a habitual residence test, but it was very weak. We strengthened it and stopped people claiming for more than three months. People will not be able to claim housing benefit and they must have a right of residence. If they do claim, they must show that they have a minimum earnings likelihood. Anything below that will not count as a job. We are tightening up the system after the mess that we were left by the last Government.

[Mr Clive Betts (Sheffield South East) (Lab)]

Does the Secretary of State really feel that it is sufficient for people to have to work in this country for only three months before they can claim out-of-work benefits?

[Mr Duncan Smith]

I will take that as a peculiar compliment. We inherited a system in which people did not have to work for any time to claim jobseeker’s allowance. Within the existing rules, we will not pay for the first three months. If people are unemployed, they will be paid for three months. After that, they will be asked to leave. That is a much tighter position than the one we inherited. I, of course, would like to take it further. As the Prime Minister set out clearly in a recent speech, he believes that there should be years of contributions before someone is eligible to claim benefits, be they tax credits or jobseeker’s allowance. When the Conservative party gets back into power, we will implement that.

Oral Answers to Questions

Clive Betts Excerpts

Monday 8th December 2014 Commons Chamber

[Mr Harper]

I do not think the hon. Gentleman is listening. I very clearly said—and I have said it a number of times here—that fixing delays to the PIP process is not at the bottom of my list; I have been very clear that it is at the top of my list of priorities. I have said that from the time I started doing this job and we have made considerable progress. We will be able to set out the up-to-date position when I give evidence to the Work and Pensions Select Committee chaired by the hon. Gentleman’s colleague, the hon. Friend Member for Aberdeen South (Dame Anne Begg). I have been invited to give an update at the end of January and I will be delighted to do so.

[Mr Clive Betts (Sheffield South East) (Lab)]

12. What estimate he has made of his Department’s expenditure on in-work housing benefit for migrant workers from the European economic area who have arrived in the UK within the last (a) six, (b) 12 and (c) 24 months.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

The Government inherited a system that did not record the nationality of benefit recipients—we are changing that—and as a result local authorities currently hold limited data on housing benefit. However, based on the latest figures we have been able to glean, we estimate that some 420,000 EU families have been claiming child benefit at a cost of £650 million; and 317,000 EU citizens are claiming tax credits at a cost of £2.2 billion.

[Mr Betts]

Many of my constituents express a real sense of grievance when people come to this country and claim benefits to which they have not contributed. It is now the policy of the Government—and, indeed, of the Opposition—that before people can claim unemployment-related benefits, they should have to work in this country for a longer period. Should a similar principle apply to the claiming of housing benefit?

[Mr Duncan Smith]

In a sense, I agree with the hon. Gentleman. We have already introduced restrictions, right now, on access to benefits, tightening up the time scales so that people cannot get them for the first three months until they prove they are, in fact, resident here, and then only for three months after that. We have also stopped such people claiming housing benefit, but the hon. Gentleman will know that my right hon. Friend the Prime Minister has announced that we will want to go much further and ensure that people cannot claim benefits for four years until they can prove to have been resident here.

Housing Benefit (Wales)

Clive Betts Excerpts

Thursday 1st May 2014 Westminster Hall

[Jessica Morden (Newport East) (Lab)]

I agree with other Committee members, who were kind of schmoozing the hon. Member for Monmouth (David T. C. Davies), congratulating him on how he chaired the inquiry. I should mention, in fairness to him, the lovely, careful, measured way in which he spoke today, in his capacity as Chair of the Welsh Affairs Committee—apart from the end part of his speech.

A year on from the bedroom tax, which is what I will mostly be talking about, this is a welcome opportunity to consider whether that controversial policy, which has caused so much hardship among my constituents, is working out. I am aware that I have a Privy Counsellor next to me, lining up to speak, and that we do not have much time. This is an important opportunity that allows us as much time as possible to press the Minister on how many of our report’s recommendations he has followed through—few, I suspect, if not none, but I will welcome being corrected at the end if I am wrong.

We need to know more about how the Government are monitoring this measure and how it is working in practice. Although I know, anecdotally, that housing associations, tenants, constituents and tenants associations are struggling, it is important that we hear from the Government what they are doing to monitor the situation.

The situation is different in various parts of Wales. The hon. Member for Montgomeryshire (Glyn Davies) said that 600 households in his constituency were affected. In Newport, the figure is more than 2,000. In my part of the Monmouth council area, which I share with the hon. Member for Monmouth, I suspect that a higher proportion of people are affected by the bedroom tax than in his area. It is hitting my constituents harder.

It is worth labouring the point and saying that we, as a Committee, decided to consider this matter because Wales is hit hardest. We heard earlier that more than 40,000 tenants could be affected—46% of working age tenants in Wales, the highest proportion of any region in Great Britain, where the average is 31%. The evidence that we heard in the inquiry, as most hon. Members have mentioned, was that, because our housing stock is different, there would be a lack of sufficient one and two-bedroom homes available in Wales to ensure that everyone who wanted to be re-housed could be.

Obviously, the Government’s two stated aims were to save money and to make the most efficient use of housing stock. In the numerous debates that we have had on this subject in the past year, we Opposition Members have mentioned real, hard cases, showing how the bedroom tax has hit disabled people who have had adaptations done to their homes, divorced parents who have their children to stay at the weekend and want to maintain that relationship, and people who just cannot afford to stay in their home and community, because they cannot afford to pay extra.

Clearly, the Government ignore the real impacts of these cases that we have repeatedly raised with them and always respond with the usual battery of figures. I make no apology for talking about just a few cases that have been brought to me, because, after all, if we do not know what is happening on the ground, we do not know how this policy is panning out.

In one case recently, a mother and her 30-year-old disabled son were desperate for him to be able develop his independence. An appropriate adapted property was being found for him, but the mother would then have been hit by the bedroom tax. She had no means of paying the extra money and no hope of moving to a smaller property.

I have seen numerous divorced parents at my constituency surgery, whose kids come to stay with them on weekends and during the holidays. Recently, a man had been laid off from his job, with no ability to pay the extra money involved. He was aghast that he should take in a lodger, as the Government suggested, because that would mean that his children would have nowhere to sleep when they came to stay. A woman called up, horrified, when she realised that she and her 11-year-old son who has severe autism would be penalised for the sensory room, recommended by the paediatrician, that was essential for him.

It is no surprise that Newport and Caldicot citizens advice bureaux, which I visited over Easter, and the food banks, report that the benefits changes, including the bedroom tax, are the biggest issues that people want help with. Are people moving to smaller properties and is that leading to a greater use of housing stock? No. As my hon. Friend the Member for Vale of Clwyd (Chris Ruane) mentioned, according to figures obtained by the BBC, only 6% of tenants affected have moved. As has been mentioned, we identified in our report that a lack of sufficient one and two-bedroom properties is a particular issue in Wales. The Joseph Rowntree Foundation found that, by November last year, 22% of those still affected by the legislation remained registered for a transfer or mutual exchange.

Housing associations are being creative. Newport City Homes is trying to be innovative. It has been forced to change its policy for housing previously designated for over-60s. That has had a knock-on effect, causing anxiety among elderly residents in settled communities. It is a difficult change.

What is happening to those who cannot move? The National Housing Federation has found that two thirds of households affected cannot find the money to pay up and arrears are stacking up. Last year, I researched housing associations in Wales and discovered that there had been a 51% increase in rent arrears for those affected by the bedroom tax. Figures from the Community Housing Cymru sector survey show that the bedroom tax has led to rent arrears of more than £2 million. It estimates that that means that the financial capacity to build 1,000 affordable homes has been lost in Wales.

Bron Afon housing association—I apologise to my right hon. Friend the Member for Torfaen (Paul Murphy) for always mentioning that housing association in his constituency—said that coping measures to deal with this will

“eat into money that would otherwise be used to build houses”

and that housing associations will have to

“divert more money to survive rather than develop”.

Wales and West Housing Association has conducted research into the impact on disabled people and the cost of adaptations. It says that it would cost the public purse some £40 million to adapt smaller properties and that that

“makes no financial sense whatsoever as it could wipe out the potential savings in housing benefit for many years”.

The Committee heard evidence that people’s moving to the private rented sector would be a more expensive option in many areas. According to the Library, the amount of housing benefit paid to private landlords would rise from £7.9 billion to £9.4 billion.

I know first hand that tenants and housing associations are struggling. I should like the Minister to explain how he has addressed the recommendations in our report: specifically, whether and how he has monitored how hard it is for local authorities and housing associations to find smaller accommodation; how the Government have monitored the cost of accommodation in the private rented sector, as we asked in the report, following the introduction of this policy; how he has monitored the impact on disabled people and the cost of their adaptations; and how direct payments, which no hon. Members in this debate have had much time to touch on, are monitored.

I hope that, given the time available, there is a chance for the Government to provide us with a substantive response on these issues.

[Mr Clive Betts (in the Chair)]

Order. We are constrained for time. We need to get to the end of this debate by 3.30 pm and four Opposition Members want to speak: Paul Murphy, Madeleine Moon, Geraint Davies and Huw Irranca-Davies. The Front-Bench spokesmen need 10 minutes each, so there is 10 minutes for the four of you. That is not very much time, but if you can manage that between you it would help to let everybody in.

[David T. C. Davies]

On a point of order, Mr Betts. Other Members have told me that they would be quite relaxed if the second debate was cut short. I am clearly in the hands of Labour Members, but as Chair of the Select Committee I would be perfectly relaxed if the first debate ran on a bit and the second was cut a bit. I would not want to impose, but I believe that that is the general view of Committee members.

[Mr Clive Betts (in the Chair)]

That is helpful. If that is the general feeling of the Select Committee, I am more than happy to reflect that. If we take another 10 minutes off the other debate, that gives us five minutes for each of the four speakers.

--- Later in debate ---

[Huw Irranca-Davies (Ogmore) (Lab)]

It is great to serve under your stewardship this afternoon, Mr Betts. I commend the way that the debate was introduced by the hon. Member for Monmouth (David T. C. Davies), the Chair of the Welsh Affairs Committee, as well as the speeches that have been made and the work that the Committee does. I will add only a few points.

In my constituency, the policy is about as popular as the poll tax was. There is a march today in Bridgend. I would love to be there, but like my hon. Friend the Member for Bridgend (Mrs Moon), I am speaking up in Parliament on behalf of constituents; otherwise we would be there. I have spoken on platforms in Cardiff and elsewhere in direct opposition to the rule. The Minister will have heard repeated, emphatic and passionate accounts of the impact of the policy on individuals. Undoubtedly, many people are being pushed below the UN definition of poverty. The situation in the Bridgend area that my hon. Friend and I represent—the local authority area covers two parliamentary constituencies—is not unrelated to what one report says is a tenfold increase in the number of people seeking debt advice after getting payday loans. Those matters are related.

The present state of affairs is not distant from the fact that the Government’s report on food aid that came out after a year’s delay showed that the reason for the number of people being driven to use food banks is not increased publicity about food banks, as the Prime Minister said at Prime Minister’s questions the other day. There are three factors, and two are directly related to Government policy. One is benefit changes, and the second is delays in benefits. I could give the Minister the third, which is also related to the Government, but I will leave it at those two. Those things are tied in, and are part and parcel of the issue.

My right hon. Friend the Member for Torfaen (Paul Murphy) rightly said that there is a complete failure of understanding about the importance of social housing in parts of Wales—particularly south Wales. That housing is regarded not as a unit of accommodation but as a lifetime home. People have long aspired to be in their home, and not to be in private rented accommodation, which may well be the aspiration in—I do not know—Belgravia or somewhere. They aspire to be in either council accommodation or social housing through a housing association. That is why people have really been angered.

My hon. Friend the Member for Bridgend produced a plethora of data, and they apply to my constituency as well as hers. Within the past few months, Community Housing Cymru has produced an analysis showing that 78% of its members—35 housing association members in Wales provide 156,000 homes to 10% of the Welsh population—have seen a rise in rent arrears. The analysis showed 855 larger properties lying empty and that figure was expected to increase in the next 12 months. It showed that only 3% of tenants downsize, and I can confirm that that is true of my constituency: something like 25 people from about 1,000 properties have downsized. Also, members will deliver more than 1,200 fewer affordable homes, because they will be servicing a £40 million debt as a result of the policy.

We can have a debate about whether the policy is callous and cruel, which I think it is, but we need to debate the fact that it was dumped into areas such as mine overnight, without foresight or planning to enable alternative properties to be provided. The ineptitude of the decision, which means that housing associations will convert and build fewer properties, is causing misery. I ask the Minister to act according to the word and the spirit of what Lord Freud said when he spoke to the all-party group on housing, about evidence of “in extensis” impact on areas. There undoubtedly is one. I can see the Minister smiling. There is an impact—not just on my constituents, but on housing associations in my constituency. Will the Minister accept a delegation of not simply tenants but housing associations and local authorities from south Wales to talk about what “in extensis” means and how we can avoid the impacts being prolonged any further?

[Mr Clive Betts (in the Chair)]

We move on to the Front-Bench spokesmen, who have 10 minutes each.

--- Later in debate ---

[Steve Webb]

No—I have only one and a quarter minutes left. Why did we not hear about the 13,000 people in Wales living in overcrowded social sector accommodation? Where was their voice in the debate? What about the people living in overcrowded private sector accommodation, or the 90,000 people on housing waiting lists?

There is a whole set of unmet housing need while we have people under-occupying social rented accommodation —through no fault of their own, so it is not a criticism of them, but it is a fact. The hon. Member for Swansea West (Geraint Davies) said that when people’s kids grow up, they should go on being able to live in a big family house, but what about the people who would love a big family house, but cannot get it because it is under-occupied? We have to help people with the transition, but that is why substantial additional DHPs have been found.

Finally, on the specific issue of adapted accommodation. We would have loved it had we been able to write a law in Whitehall that said, “This is adapted; this isn’t. Here is how we define it in an Act of Parliament or a statutory instrument. We will have a blanket exemption.” That would have been great. We looked hard, but we could not think of a national and consistent way of defining what it was. We therefore found the money instead—£25 million across Great Britain, which was our estimate of the cost of buying out the impact on substantially adapted properties. No one in the country living in a substantially adapted property who goes to a local authority should be turned away because there is not the money for DHP. We have given the local authorities the money, and that should not need to happen.

There is lots more that I would love to say, but I am constrained by time. I hope that I have been able to give some responses to the questions asked by the Chairman of the Committee.

[Mr Clive Betts (in the Chair)]

I will ask the Chairman of the Select Committee to respond briefly to this debate and then to introduce the second debate, which is on the Work programme in Wales. While that is happening, will hon. Members who want to speak in that debate indicate that to me? It will be helpful in apportioning the time.

Work Programme (Wales)

Clive Betts Excerpts

Thursday 1st May 2014 Westminster Hall

[Several hon. Members]

rose—

[Mr Clive Betts (in the Chair)]

Order. I will call Nick Smith next, and then Guto Bebb. I will allow them six minutes each to speak, as they did not speak during the previous debate. For the other three speakers, I will cut the time down to four minutes to get the Front-Bench speakers in, although I will have to squeeze them a bit as well, if that is okay.

--- Later in debate ---

[Several hon. Members]

rose—

[Mr Clive Betts (in the Chair)]

Order. The time limit is now four minutes for the remaining Members who wish to speak.

--- Later in debate ---

[Several hon. Members]

rose—

[Mr Clive Betts (in the Chair)]

Order. The Front-Bench Members have eight minutes each, leaving a couple of minutes for the Chair of the Select Committee to sum up at the end.

Housing Benefit

Clive Betts Excerpts

Wednesday 26th February 2014 Commons Chamber

[Rachel Reeves]

But as the hon. Lady well knows, the reality is that for many of these people it is not a spare bedroom. It is the bedroom that their sons and daughters who serve in the armed forces stay in when they come home; it is the bedroom that their sons and daughters stay in when they are home from university; it is the bedroom that is used to store the dialysis equipment; and it is the bedroom that the carer comes to stay in. These are not spare bedrooms; these are rooms that are needed by many people with disabilities or with children. We can debate whether it is a spare room subsidy or a bedroom tax, but what we do not have to debate is the impact it is having on people. In the hon. Lady’s constituency and mine, and in places across the country, people are suffering because of the decisions this Government are making. The Government should instead do the right thing and cancel the bedroom tax.

[Mr Clive Betts (Sheffield South East) (Lab)]

I was talking the other day to Tony Stacey, the chief executive of South Yorkshire housing association, which is a very well run local association in Sheffield and the surrounding areas. He pointed out not only that its arrears are going up, but that it is spending £200,000 more on helping to advise its tenants and on collection. The National Housing Federation says that when those extra costs of arrears and collection are added up nationally, £1.5 billion of development opportunities will be lost as a result of this Government’s welfare reforms.

[Rachel Reeves]

All that money could have been spent on building the houses we need to deal with the overcrowding crisis and other crises of which the Government speak; instead, house building is at its lowest level since the 1920s.

Let me turn to the loophole. Just when we thought that things could not get any worse, the latest shocking turn in this sad and sorry story was the revelation last month that because the Government could not even draft their own legislation and regulations correctly, many of the households that they had told local authorities should be made to pay the bedroom tax—those who had been in continual receipt of housing benefit for the same residence since 1996—were in fact not covered by the legislation.

--- Later in debate ---

[Sheila Gilmore]

rose—

[Mr Betts]

rose—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am just going to help a little bit. I am sure that the hon. Gentleman wants to catch my eye, in which case he will not get in at the moment because of how many interventions we have already had. That is how bad it is: we are cutting each other’s speaking times down. That will have to go down to four minutes shortly and some people will drop off the end.

Oral Answers to Questions

Clive Betts Excerpts

Monday 24th February 2014 Commons Chamber

[Steve Webb]

The hon. Lady is very knowledgeable about these matters, and she will know that local authorities make their decisions on a case-by-case basis. Clearly, they do not have to include income from DLA, but they are free to do so. If she believes that her local authority should not have done so in an individual case, she should make representations to it.

[Mr Clive Betts (Sheffield South East) (Lab)]

Following on from that question, the Minister must know that in assessing entitlement to income-related benefits, entitlement to disability benefits is not taken into account. The one exception to that policy is discretionary housing payments. It is specifically in the guidance that local authorities can take them into account and means-test them in the way that he described. Will he change and reissue the guidance, so that this one area where disability payments are means-tested is removed from the scene?