Local Housing Allowance and Homelessness

David Drew Excerpts

Wednesday 24th July 2019 Westminster Hall

[Dr David Drew (Stroud) (Lab/Co-op)]

I am delighted to serve under your chairmanship, Mr Bailey. I congratulate my hon. Friend the Member for Ealing, Southall (Mr Sharma) on leading the debate so thoroughly. I shall be brief.

The Minister will not be surprised to hear my usual plea for a redesign of the local housing areas. Stroud was put in the same local housing area as Gloucester. That had nothing to do with this Government—a previous Government did it—but because Gloucester’s rents are traditionally much lower than Stroud’s, it has affected us particularly badly. I hope that the Minister will be able to tell us some good things, because it has had two effects.

First, people on lower incomes in my constituency are now being forced towards Gloucester, because it is the only place where they can pick up private renting. Secondly and more particularly, there is a huge shortfall. Private landlords are increasingly refusing to take anyone on benefits in the Stroud area, because they know that there is a shortfall. It has undoubtedly pushed rents up—it is difficult to prove, but that is the word on the street—which has put my local authority, Stroud District Council, under even more pressure as a result of homelessness, even though it is trying to build more houses and bring more social housing into play.

The best illustration is the horrifying figures that I and other hon. Members received from Shelter when preparing for our debate. In the Gloucester-Stroud local housing area—I suspect the figures for Stroud alone are much worse—only 9% of four-bedroom properties are within the local housing allowance.

[Anneliese Dodds (Oxford East) (Lab/Co-op)]

My hon. Friend is making a very good speech. Although the problem may be most acute in London and the south-east, it applies right across the UK, as he points out. In my constituency there is not a single four-bed, three-bed or two-bed property that fits within the LHA, and the only one-beds are caravans or the odd sheltered housing flat. It applies everywhere.

[Dr Drew]

I agree. My hon. Friend’s example shows, in a nutshell, what it is like out there. It is not only that housing is not available, but that the limited amount available is of such poor quality that families in a desperate state are being forced into even greater poverty. They then almost certainly have to top up.

The figures in the Gloucester-Stroud area show a shortfall of £27.24 for a single room, which rises to £112.46 for a four-bed property—if there even are any, which I suspect there are not. I make a heartfelt plea to the Minister that this cannot go on. Such is the difficulty we face with the dislocation in the housing market. We have to accept that private renting is there for people who do not stand a chance of getting a council property or any other form of social housing, because they are so far down the band system as a result of whatever may have happened in their past, their inability to pay the rent or their not being local to the area. They end up renting in the private sector; they get penalised because they cannot find anything; if they do find something it is poor—and then they have to top up.

Please, Minister, can we look at this as a crisis and start doing something about it?

Oral Answers to Questions

David Drew Excerpts

Monday 1st July 2019 Commons Chamber

[Dr David Drew (Stroud) (Lab/Co-op)]

I welcome what the Minister said the other day about reviewing how local housing allowance areas need to be redefined. Does he accept that, because Stroud is in the same area as Gloucester, we are now losing a significant number of people from the private sector because they cannot afford to top up? Will he therefore look at this as a matter of urgency?

[Will Quince]

I thank the hon. Gentleman for his question. He is right that the broad market rental areas have some anomalies. I have officials looking into this. It is a huge and complex piece of work, given that there are approximately 900 of those areas. It is therefore not something that can be done quickly, but I recognise the issue and I am working on it.

Local Housing Allowance: Supreme Court Ruling

David Drew Excerpts

Thursday 13th June 2019 Commons Chamber

[Will Quince]

The hon. Gentleman should not underestimate my determination—I chaired the all-party group on ending homelessness—to absolutely deliver on our commitments to halve and then end rough sleeping. I recognise what he says about LHA rates, but that is not the case across the country. Rates are an issue in some parts of the country but not in others, which is why I am looking at this very carefully. I have been working with my counterparts in the Ministry of Housing, Communities and Local Government, as he suggests, because supply is also an issue.

[Dr David Drew (Stroud) (Lab/Co-op)]

The local housing allowance causes us real problems in Stroud, because we are in the same area as Gloucester, where rents are much lower. That is nothing to do with this Minister, let alone this Government or previous, successive Governments; it was a Labour Government who grouped those areas together. Will he at least take a look at the impact on those groupings where rents are higher in some areas and lower in others?

[Will Quince]

The hon. Gentleman raises a good point. Those groupings are based on broad rental market areas, and in some parts of the country they pose an issue. A number of Members from across the House have raised this issue with me and I am looking at it.

Pension Funds: Financial and Ethical Investments

David Drew Excerpts

Wednesday 22nd May 2019 Westminster Hall

[Sir Edward Davey (Kingston and Surbiton) (LD)]

I beg to move,

That this House has considered financial and ethical risks of investments in fossil fuel companies by pension funds.

I refer Members to my entry in the Register of Members’ Financial Interests, in which I disclose my interest in renewable energy, particularly solar.

Parliament has declared a climate emergency. I welcome that tremendously, but it prompts the question: how do we solve that emergency? The good news is that many of the technologies we need are already here, and they are developing fast. From solar to wind to storage, their price is coming down fast—far faster than many people expected—and their reliability is increasing dramatically. On top of that, massive innovation will propel those technologies further forward, and we will enter a cheap green energy age.

The barriers to dealing with the climate emergency are no longer technological; they are more about policy, leadership and cash. We need politicians to show leadership, but we also need to ensure that investment funds get behind the new technologies at a speed and with an urgency that currently we are not seeing. That is why we, as a country and as the world, need to disinvest from fossil fuels and dirty technologies, and reinvest in clean green technologies. The question is how we propel that as fast as possible.

I believe we need a system-wide approach. We have to decarbonise capitalism at a fundamental level across the whole of the City—the debt markets, the stock exchange, the banks, the Bank of England’s own balance sheet and the pension funds. The Committee on Climate Change has asked for Britain to become carbon net zero by 2050, but we produce only 1% to 1.5% of global greenhouse gas emissions. However, 15% of the world’s greenhouse gas emissions are funded in London, so not only do we have the power to get our own country’s greenhouse gas emissions down to zero, but we can help spread that around the world and be a real leader. We could be the green finance capital of the world and say, “We will no longer finance the climate crisis in our country.” If we did that, we would show dramatic leadership in the world on this emergency. We should start with pensions.

[Dr David Drew (Stroud) (Lab/Co-op)]

The right hon. Gentleman is making a cogent argument. Can he assure me that the parliamentary pension fund, which has long been looking at this issue, is now clear of fossil fuels? We should ensure that that is completely the case.

[Sir Edward Davey]

I believe that is not the case. We need to ensure that the parliamentary pension fund becomes zero-carbon. We as Parliament need to say, “Divest Parliament.” That would show leadership both to public schemes, particularly in local authorities, and to the wider sector. Let us remember that we have already discovered four to five times the fossil fuels the world would need to exceed a climate change budget. We already have too many fossil fuels. We should not invest in more. We should disinvest now.

Pensions Dashboard

David Drew Excerpts

Wednesday 6th February 2019 Westminster Hall

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, and I congratulate the hon. Member for Hendon (Dr Offord) on securing it. I am happy to make a comment within the timescale that you have set out, Mrs Ryan,

Pensions are a thorny issue; many people made their financial plans based on the promise of a pension that has not materialised. There are also those who invested, only to lose their money and get only 30p in the pound of their investment, but that is a debate for another day; in fact, we had a debate on that last Thursday in the main Chamber; it was on Equitable Life, and those who had paid into a pension but did not get their money. It is easy to understand the concerns that some of us have about people’s need for a pension; the hon. Gentleman referred to the need for a pensions dashboard.

I can well recall—although it was not yesterday—my mum taking me down to the Northern Bank, as it was, to open my first account when I was 16. I also remember that when I turned 18, she took me to fill in the policy with the insurance man and said, “Make sure you’re putting money aside every month for that purpose.” That was thriftiness, but it was also really good direction from my mum, as always, because it was important that we knew why we did those things. I am a wee bit older now, and I am glad that I signed up for those things many years ago, because I will benefit from them in the years ahead.

Today’s debate is an attempt to ensure that people are not left in the lurch in the way that women born in the 1950s and the Equitable Life savers have been. It is an issue that it is certainly worth people considering if they are working hard and seeking to invest, so that someday they do not have to work, but can enjoy life without having to miss out on the things that they have while working a nine-to-five job. It is my sincere hope and desire that the work that the Treasury Committee and others are doing to prevent another Equitable Life scandal will be successful, but irrespective of that, a dashboard with real-time information has to be useful for those who are planning their future, as the hon. Gentleman said.

I must say that the key decisions that came from the Government consultation give rise to some concern. One concern relates to data security. The fact that all financials are held and accessible by the industry independently raises concern. I hope the Minister can reassure me on that. My concern is heightened by the breach in Independent Parliamentary Standards Authority data security, which led to the addresses of my staff members being released. That shook our office and caused great concern, given that we hail from a political party in Northern Ireland, and given its history. Such data security breaches underline my concerns. The Government must ensure that there are guidelines in place to reassure people, including my constituents and me.

I also have grave concerns regarding proposals that would result in pension fund members being targeted by those who want their business. Although I agree that multiple dashboards would improve consumer choice, it is essential that alongside those—I think the hon. Gentleman referred to this—there be a non-commercial dashboard, hosted by the single financial guidance body, and offering an impartial service to those who prefer that, or who may not want to be targeted by the market. We must cover all choices and tastes.

Another essential issue for me is that the cost of this dashboard should not hit the pension or the consumers; there should rather be an obligation on the industry to bear the cost. Although the autumn Budget has made available funding for 2019-20 to facilitate the industry’s making dashboards a reality, it is clear that that is to get the dashboard on its feet, as opposed to making it a Government service. That is another consideration.

I am conscious of time, so I will conclude with this point. In principle, I support the idea of people having greater knowledge of their financial status. There are so many people who come into my office with their pension annual statement, not understanding what it means—not only older people, but young career people who have been made to sign up to a pension, but have no idea what the money that they pay, or their employer pays, is used for. It is surprising how many people do not know.

[Dr David Drew (Stroud) (Lab/Co-op)]

That is why we need proper enterprise education in schools. Does the hon. Gentleman agree that that is when it should start, and that it should not end until people enter the workplace?

[Jim Shannon]

I thank the hon. Gentleman; just as the hon. Member for Hendon thought that someone had read his script, my next words are on the very subject to which the hon. Gentleman refers. The subject is not covered in school, but it clearly should be, because these young people literally have no idea what their pension means. He is absolutely right, and his intervention underlines the responsibilities that we have a duty to perform. I sincerely believe that a pension dashboard can help this generation, but the safety and security of financial information is paramount.

I look forward to the Minister’s response; I feel that some of the assurances I have sought in this small contribution are assurances that he can provide, and if he does, he will set a lot of minds at rest.

State Pension: Women born in the 1950s

David Drew Excerpts

Thursday 22nd November 2018 Westminster Hall

[Patricia Gibson]

The Scottish National party commissioned independent research into how this could be resolved, but the Government rejected it. As far as I can see, they have rejected every other potential solution proposed from every quarter. I would like the Minister to tell us how he thinks the matter can be progressed, because doing nothing is not a sustainable option—certainly not for the WASPI women.

[Dr David Drew (Stroud) (Lab/Co-op)]

Will the hon. Lady give way?

[Patricia Gibson]

I will make some progress.

The WASPI women’s situation is doubly unjust because they are a group who have faced pay discrimination throughout their working lives. They have been paid less, acknowledged less and valued less. Now, when they should be enjoying retirement, they are expected to sit quietly and simply accept the loss of their well-deserved and much-needed state pension. This is not pin money; it is money to pay the rent, buy food, do the shopping and pay the bills. How is that decent, by any measure? It is an absolute disgrace.

The Minister really must have a brass neck if he thinks he can talk his way out of this. The UK Government’s lack of engagement on the issue has been breathtaking in its arrogance. These women know that many of the hardest hit among their number have been driven to self-harm and suicide. Of 873 respondents to research undertaken for the BackTo60 campaign group by the charity SOS Silence of Suicide, almost half had self-harmed because of the stress and hardship caused by this pension reform, while 46% reported having suicidal thoughts as a direct result, and 70 women had attempted to take their own lives. All the while, the UK Government wring their hands and stutter about people living longer.

Such is the Government’s intransigence that these women have been forced to go to court. BackTo60 has launched a judicial review to force the Government to reverse their decision. The argument will be made by Michael Mansfield QC that the pension policy implemented by successive Governments is a gross injustice and is discriminatory, even though the delay in paying out the pensions is in the name of equality—there’s a wee irony for you. Law professor Jackie Jones has argued that the UK is in breach of its international treaty obligations. The demand for what is right—fair transitional arrangements for these women—will not be silenced.

Inconveniently for the Government, the former Pensions Minister, Steven Webb, has conceded that not enough was done to inform and prepare these women for the changes. The Select Committee on Work and Pensions concluded that

“more could and should have been done”

to communicate the changes. It seems that a mess was made of the acceleration of the changes in the Pensions Act 2011, but the only people to pay the price for that mess are the women involved.

--- Later in debate ---

[Alex Burghart]

The hon. Gentleman makes a good point. Having spoken to women in my constituency, I understand the stress and difficulty that this change has caused. However, is clear that any attempt to reverse the policy would be extraordinarily expensive.

[Dr Drew]

Will the hon. Gentleman give way?

[Alex Burghart]

I look to you, Chair, to know whether I am entitled to take any more interventions.

--- Later in debate ---

[Mohammad Yasin (Bedford) (Lab)]

It is an honour to serve under your chairmanship, Mr Bone. I thank the hon. Member for North Ayrshire and Arran (Patricia Gibson) for securing this very important debate. It is important for all parliamentarians who believe in equality to continue the fight to put right a wrong for women who were born in the 1950s. It is clear that the Government have given up on them.

Last month, we learned from the former Pensions Minister that, as Secretary of State, the right hon. Member for Chingford and Woodford Green (Mr Duncan Smith) refused to engage with women born in the 1950s who were adversely affected. She was instructed not to speak to them and was told that they would go away sooner or later. When will the Government get the message that the WASPI women are not going anywhere? People seeking to put right a great injustice do not just go away. Good for them!

Last week’s report by the UN expert on extreme poverty showed that the number of pensioners living in poverty in the UK had risen by 300,000 to 16% in the four years to 2016-17, despite measures such as the triple-lock guarantee. The rapporteur said:

“The impact of the changes to pensionable age is such as to severely penalise those who happen to be on the cusp of retirement and who had well-founded expectations of entering the next phase of their lives, rather than being plunged back into a workforce for which many of them were ill-prepared and to which they could not reasonably have been expected to adjust with no notice.”

He said that the uptick in pensioner poverty was driven by single pensioners, who are significantly more likely to be women. The Government’s response to that damning evidence has been to ignore the findings and shoot the messenger.

[Dr Drew]

Does my hon. Friend agree that the least the Government could do is to make an actuarial assessment of what the true cost would be of paying compensation to people who have clearly lost out heavily?

[Mohammad Yasin]

I thank my hon. Friend for that very important point. I agree 100%.

The Government are completely ignoring that evidence. The new Secretary of State for Work and Pensions said that that excellent report on extreme poverty is “highly inappropriate”, but she missed the point. What is highly inappropriate is the Government’s arrogant and dogmatic policy on pension inequality. I have received heartbreaking letters from women who have worked hard and paid their dues all their lives, and have now found themselves struggling and humiliated. There are those who are faring better, but only because they can rely on spouses to help them out. Why should they have to do that? Women who do not have their option, perhaps because their spouse is dead, have found themselves destitute at a vulnerable time in their lives. The Government’s appalling response is to tell those women, who have worked for nearly 40 years, to get on their bike and try to find a job. That is highly inappropriate.

If the Government were even remotely in touch with real life, they would know that that is not an option for most of those women. Many are unable to work or have caring responsibilities for elderly parents, spouses and grandchildren. Instead of dismissing the women born in the 1950s, who are fighting for their rights, and dismissing the UN special rapporteur’s report, the Government should make the welfare system more humane. If they do not, they will be dismissed at the next general election.

--- Later in debate ---

[Grahame Morris (Easington) (Lab)]

I thank you, Mr Bone, for calling me to speak, and my friend the hon. Member for North Ayrshire and Arran (Patricia Gibson) for securing this important and timely debate. It is absolutely essential to keep this issue on the agenda, as it affects every single constituency. Though not as many of my constituents are affected by the change as those of the hon. Member for Isle of Wight (Mr Seely), nevertheless 4,542 women in Easington are, and I owe it to them to keep fighting until the Government give them the justice that they deserve.

I want to mention my late constituent, Val Roberts. I have referred to her before. She was a determined campaigner in the interests of WASPI women. As I mentioned in a previous debate, she was left with no alternative but to sell her home and move into private rented accommodation. Sadly, Valerie has passed away, and that has redoubled my determination to see that others receive their due state pension.

We have debated this issue many times in the main Chamber and here in the Westminster Hall Chamber. I pay tribute to the WASPI women for their incredibly active campaign over the years and in particular over the past few months. Early-day motion 63 has been signed by 196 right hon. and hon. Members, including Conservative Members—notably the hon. Member for Worthing West (Sir Peter Bottomley)—and others present such as my hon. Friend the Member for Weaver Vale (Mike Amesbury) and the hon. Members for Glasgow South West (Chris Stephens) and for Strangford (Jim Shannon), while numerous others have also pushed the campaign forward. An e-petition laid before Parliament attracted well over 100,000 signatures, and support for the campaign continues to grow.

My recollection of a previous Westminster Hall debate is that it was so oversubscribed—as this one would have been today but for the Brexit statement in the main Chamber—that Members were sitting on the window ledges, as those who were at the debate will recall. This is a live political issue that will not go away.

[Dr Drew]

Does my hon. Friend agree that part of the reason why the WASPI women are so frustrated is that the Government will not engage with the matter? I do not expect them just to give the money over, but it is time for the Government to have a proper discussion with the representatives of WASPI to see whether there is a way forward. At the moment, there does not appear to be. Does my hon. Friend agree that that is the Government’s fault?

[Grahame Morris]

Absolutely. I could not have put it better myself. I hope, however, that the Minister will come up with some positive solutions to address this terrible injustice.

We have heard that 3.8 million women are affected, many of whom will be driven into poverty and reliance on food banks. That is a disgrace in one of the wealthiest nations on earth. Although the report by Philip Alston, the United Nations expert, has not been greeted with enormous acclaim by Department for Work and Pensions Ministers, we should look at what he says. He talked to various campaign groups, including the Women Against State Pension Inequality. He says that certain women, including the WASPI group, have been affected disproportionately by recent changes in policy, particularly those in relation to the pension age. Philip Alston’s statement on extreme poverty and human rights in the UK showed that in the four years to 2016-17 the number of pensioners living in poverty had risen by 300,000, or 16%. That is despite assurances from the Government that measures such as the triple lock guarantee would ensure that pensioner poverty was a thing of the past.

I mentioned this in an intervention, but it is an important point, which I hope the Minister will address. This is not just about variations in life expectancy—Ministers keep telling us that people are living longer, so in order to make pensions affordable the state retirement age has to be adjusted. There are huge regional variations not only in life expectancy, but in the amount of time that a retired person can expect to live a healthy and active lifestyle. That, too, should be factored into the Government’s calculations.

Defined-benefit Pension Schemes

David Drew Excerpts

Tuesday 10th July 2018 Westminster Hall

[Laura Smith (Crewe and Nantwich) (Lab)]

I beg to move,

That this House has considered protecting defined-benefit pension schemes.

It is a pleasure to serve under your chairmanship, Mr Hollobone, and to introduce this important debate. I welcome my hon. Friend the Member for Birmingham, Erdington (Jack Dromey) and the Minister; their presence underlines the importance of this issue.

There are few more precious assets than a pension. Pensions are not benefits; they are deferred wages deducted from the previous earnings of responsible working people who decided to save diligently during their working life, in return for financial security in retirement. As we all know, the funds that are made up of those savings invest huge amounts in our economy, as well as providing for our pensioners in retirement. Dignity in later life is something that every Member present values immensely. We should all feel duty-bound to do everything we possibly can to guarantee that for each and every pensioner in our country, without exception.

Let me begin by stating from the outset that I am no expert on pensions. I have called this debate because it is of the utmost importance to workers in my constituency. I believe that will be the case for all Members here today. It is incumbent on us all to develop our understanding of the key issues to ensure that the livelihoods of pensioners up and down our country are safeguarded, and to ensure dignity in later life for all.

Providing our pensioners with an income that they can live on comfortably is a key pillar of dignity in later life. The fight against pensioner poverty must therefore include a determined effort to provide the highest quality pensions in the most secure and sustainable way. Defined-benefit pension schemes have offered some workers precisely that for many years. The attractiveness of an affordable scheme that enables them to plan their retirement by knowing in advance precisely how much they will be paid is undoubtedly a key factor for many workers when choosing their employer. If we are to encourage more workers to save, responsible choices must be rewarded. Any pension fund deficits that arise are certainly not the fault of the scheme member, who has simply chosen to sacrifice pay today for pension tomorrow so that they have an adequate income after they retire. We must certainly avoid sending any message that deters current and future generations of workers from saving for retirement.

This issue is particularly topical in my constituency. Not only are many workers affected by the recent collapse of Carillion; more than 1,000 workers at Bentley Motors are in discussions with their employer about the future, and potential closure, of their DB scheme. Former Rolls-Royce employees, some of whom have been paying into the scheme for almost 50 years, face the prospect of serious financial hardship in retirement, with the potential to lose hundreds of thousands of pounds. The younger workers in the scheme stand to lose the most. I will come on to intergenerational unfairness towards the end of my speech, but I would welcome a commitment from the Minister to discuss this particular case with me in the near future, to see what support he can give to scheme members in Crewe and Nantwich.

Auto-enrolment has been a success in that it has increased the number of workers saving for retirement, so I applaud the Government’s continued efforts in that respect. However, auto-enrolment cannot be seen by employers as a retreat in which they can hide from their responsibilities under existing DB schemes. DB schemes appear to be working well—the Minister said so in his address to the TUC earlier this year. He also said that where employers can, they should continue their responsibilities. I wholeheartedly agree with him. Research by Mercer published earlier this month suggested that DB pension deficits at FTSE 350 organisations have more than halved since January. In 2015, FTSE 100 companies paid around five times as much in dividends as they did in contributions to their DB pension schemes.

The Green Paper that the Government published last year states that in 2015, companies with a DB pension scheme deficit paid out £53 billion in dividends—25% more than their disclosed deficits. It therefore seems logical to conclude that those companies have the ability immediately to repair their pension scheme deficits by feeding dividends into deficit repair contributions.

I do not pretend that there are no issues with individual DB schemes, but in aggregate such schemes do not appear to be inherently unaffordable. We must remember that they provide decent, good-value pensions. Defined-contribution schemes require much larger contributions to have a realistic chance of providing benefits equivalent to those paid by DB schemes. The value of the pot in a DB scheme is far higher in nearly every case, and both scheme members and their employer will have paid less for it.

There also appears to be an issue with overly risk-averse assumptions threatening DB schemes. Pensions Regulator guidance allows schemes to base the discount rate on the rate of return that assets held by the fund are expected to generate over the lifetime of the scheme, yet trustees seem reluctant to use that method. There is concern that the corporate failure of Carillion will create an even more risk-averse climate.

[Dr David Drew (Stroud) (Lab/Co-op)]

I apologise for missing the start of my hon. Friend’s excellent speech. Does she agree that one of the issues is that the Pensions Regulator is unaccountable? I have had a particular issue given what has happened post-Carillion, and I have been trying to find out how the Pensions Regulator makes decisions, which is not at all clear. Does she agree that that needs to be brought up in this place so that there can be proper accountability?

[Laura Smith]

I thank my hon. Friend for making that point. From my conversation with the Minister before the debate, I am sure he will be happy to talk about that in his speech and when he meets the Pensions Regulator.

The Green Paper shows that there has been a clear decline in gilt yields over the past two decades. The public sector trade union, Unison, is of the view that most schemes that did not hedge their risk should seriously consider using that discount rate method.

Universal Credit and Welfare Changes

David Drew Excerpts

Thursday 21st June 2018 Commons Chamber

[Ms McVey]

We agree that it is important for people who are the most in need to get the most support. That is what we are doing. We are training more staff in different areas, including in disability needs, and working with various charities to ensure that that happens. However, I give another example. Caroline talks about access to work and mental health support. She has had bipolar disorder all her life but has now finally found a system that is helping her into work and listening to her. That is what our work coaches are about. We are helping more disabled people.

[Dr David Drew (Stroud) (Lab/Co-op)]

Last week in Prime Minister’s questions, I identified that the waiting time for appeals is 41 weeks for PIP and 30 weeks for ESA in the Gloucestershire area. What will the Secretary of State do to ensure that universal credit appeals do not create further delays, so that people can try to get some justice?

[Ms McVey]

I heard the hon. Gentleman raise that last week. I want to reassure him that we are working with the Ministry of Justice to increase the number of judges and the number people on tribunal panels. We are also recruiting 150 presiding officers, to ensure that we understand what is going on and make the system smoother and quicker. We obviously need to ensure that that happens for PIP, for ESA and, should we need it, for UC.

Oral Answers to Questions

David Drew Excerpts

Monday 5th February 2018 Commons Chamber

[Guy Opperman]

My hon. Friend is correct. The fuller working lives strategy, launched by the Department last year, is there specifically to support over-50s into employment and provide them with the skills and retraining that they need, and which businesses specifically value. There are a number of exemplar businesses. He will also be aware that individual people have created over 26,000 new businesses since 2011—that is for the over-50s.

[Dr David Drew (Stroud) (Lab/Co-op)]

Many older workers are not necessarily there by choice. I think in particular of the WASPI women, who are having to work because of the inadequacies of their pension provision. What are the Government going to do about this?

[Guy Opperman]

The Government have no intention of revising the Pension Acts of 1995, 2007 or 2011 introduced by previous Governments and by the coalition, but I make the point very strongly that average employment among the over-50s and the over-64s has increased dramatically since 2010.

Universal Credit: Private Rented Sector

David Drew Excerpts

Tuesday 9th January 2018 Westminster Hall

[Stephen Lloyd]

I thank the hon. Gentleman for the intervention. He raises an important point about the public sector, because housing associations and councils have also been badly affected. It is just that broadly speaking—again, everyone in this Chamber knows this, because we are experienced politicians—the public sector will be more patient and understanding as it waits for payments from universal credit. Usually, private landlords simply cannot wait, not because they are mean or what have you, but because their business model does not allow them not to be paid for month after month. As a result, there is a spike in section 21 evictions.

We now get to the Budget. Finally—although I would like to think that this was partly due to my lobbying I know that it will be thanks to many other people in this Chamber and outside—the Chancellor of the Exchequer took on board some of the fundamental criticisms that I have been making of universal credit, for years frankly, about default payments to landlords, and some changes were made. At last! It was five or six years since I had been arguing for that and advocating it, but better late than never. It will make a difference, and that I approve of. However, it is only the first part of the journey in relation to automatic default rental payments to landlords. It is the beginning, but it does not include people who are not already on automatic payments. As I understand it—the Minister may provide clarification—it also does not include all those people to whom universal credit has already been rolled out over the past few years. And it does not start until the spring. It is a step in the right direction and an acknowledgement from the Government that they made a mistake and they finally want to try to put it right, so I approve of it, but there is still much further to go.

[Dr David Drew (Stroud) (Lab/Co-op)]

Does the hon. Gentleman accept that this is one of the fundamental flaws? Local authorities have decades of experience of dealing with housing benefit, both in the public sector and, more particularly, in the private sector. We have thrown all that expertise away, which is so counterproductive. Does the hon. Gentleman agree?

[Stephen Lloyd]

I appreciate the intervention. Not only do I wholly agree, but the decisions are completely irrational. One thing that I am finding out from the Residential Landlords Association and others is that there is not adequate communication between the DWP, local authorities and landlords, so even though, in theory, it seems from the changes in the Budget that there is the beginning of an understanding from the Government that default payments will be necessary to prevent a complete car crash, there is still a long way to go towards understanding that they have made the system so complicated that things will still be very hard for residential landlords. What does that mean? It means that they will pull out in droves.

Currently, 1.2 million people are on housing benefit or LHA in the private rented sector. There is a housing crisis in this country. This is not the debate to discuss that, but we have a housing crisis; we all know that from our constituency surgeries. The Government could convert that 1.2 million to 2.4 million; it could double the number of tenants moving into the private rented sector, because the capacity is there. However, that will happen only if the Government make it easy—very straightforward—for private landlords to take on someone who is on universal credit and give them a roof over their head, and if there is that automatic default payment that is, as it says on the tin, automatic.

If I am a landlord and I take someone, or am willing to take someone, on universal credit, and give them a flat or a house, a roof over their head, the automatic situation—by mutual agreement with the tenant, I accept that that is important—would be for his or her payment on universal credit automatically to go straight into my account, the landlord’s. I was in business for years before I went into politics, and I can absolutely guarantee that despite the challenges with some tenants on universal credit, in the eyes of landlords, ultimately, a business is a business, and if a landlord is getting their payment directly into their business bank account every month—or every two weeks, as I would like, but that is another issue—then, as a business, they will look favourably on that particular group. That is something that I really urge the Minister to consider.

--- Later in debate ---

[Margaret Greenwood (Wirral West) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Gray. I congratulate the hon. Member for Eastbourne (Stephen Lloyd) on securing this really important debate. Many valuable contributions have been made, from which it is really clear that people are experiencing real hardship as a result of the impact of universal credit on ability to pay rent. The example provided by my hon. Friend the Member for Lewisham, Deptford (Vicky Foxcroft) clearly demonstrates the effect of delayed payments, and my hon. Friends the Members for Batley and Spen (Tracy Brabin) and for Newport East (Jessica Morden) spoke about the specific difficulties that single parents face in having a secure home.

It really is important that the Government take action to address the problems with universal credit in the private rented sector. Approximately 5 million households —just over 20% of the total—are in private rented accommodation, and a quarter of those are families with children. That figure is predicted to rise to just under a quarter of all households over the next five years. Some 1.2 million households currently receive housing benefit in the private rented sector, one third of which are in low-paid work and require support to help top up their rent. Prolonged delays in receiving an initial payment of universal credit have led to many claimants being in rent arrears and at risk of eviction.

The Residential Landlords Association has reported that landlords have become increasingly reluctant to rent to universal credit claimants. Two thirds of private landlords are basic rate taxpayers not on high incomes, so they need rents to be paid on time in order to pay their own bills. That puts increased pressure on the social housing sector and local authorities. Councils hit by cuts in funding from central Government are having to set aside large amounts of money to support people affected by the impact of universal credit. Newcastle City Council is spending more than £390,000 of its own resources to support UC claimants, including £88,000 to cover rent arrears; there is more than £1.2 million in uncollected rent across a tenancy base of just 27,000, purely as a result of universal credit. Nearly three quarters of the spending on discretionary housing payments by Conservative-controlled Bath and North East Somerset Council in this financial year has likewise gone to supporting universal credit claimants.

The Government announced a number of changes in the Budget that were designed to address the problems with universal credit. We welcome them as far as they go, but they do not go anywhere near far enough. For example, from February, the Government are to remove the initial seven-day waiting period, so that the wait built into universal credit at the start of a claim will be five weeks rather than six. That is still too long for people on low incomes, who in many cases are unlikely to have savings to tide them over for that period. According to the English housing survey, 66% of private renters have no savings. We need up-to-date statistics on the timeliness of payments, so that we know exactly how long people in each local authority are waiting and whether the five-week target is being met. Will the Minister make a commitment to publish regular statistics on this matter, rather than ad hoc releases when it suits the Government?

From this month, it will be possible for someone to obtain 100% of their estimated universal credit as an advance payment, which will then have to be paid back over a maximum of 12 months. However, the maximum advance for people who made an initial universal credit claim in the run-up to Christmas was only 50%, which will undoubtedly have meant hardship for many families.

If it is possible to estimate someone’s universal credit for the purpose of giving them an advance and to pay that advance within five working days, or on the same day when someone is in immediate need, why do universal credit claimants still have to wait five weeks for an initial payment to be made? Again, will the Minister make a commitment to publish regular statistics on how many people ask for advance payments, how many people receive them and the default rates on repayments? Ministers have stated repeatedly that universal credit is designed to mirror the world of work, but with 58% of new claimants who are moving on to universal credit being paid either fortnightly or weekly prior to claiming, it is time for all claimants to be offered fortnightly universal credit payments.

The Government announced that from April they will introduce a two-week run-on between a housing benefit claim and a new universal credit claim. Again, that is welcome, although it will only help people who have already been claiming housing benefit. The Government have also said that they will make it easier for direct payments to be made to landlords. However, it appears that that is principally aimed at ensuring continuity where a tenant whose housing benefit is already being paid directly to their landlord moves over to claiming universal credit. That is positive, but my Opposition colleagues and I would like to see all tenants offered the option of direct payments. For vulnerable people, who need payments to be made quickly, the need to negotiate with the Department for Work and Pensions for direct payment of housing support to a landlord can take time and effort.

Surely all tenants should have the right for payments to be paid directly to the landlord, and not just those who are vulnerable and have difficulty managing their money. Direct payments provide security for landlords renting to people who are claiming universal credit, providing them with the confidence that they will be paid. Direct payments are especially helpful in the case of people who have formerly been homeless. Private landlords may be much more wary of renting to them, and people who have been homeless may not have had recent experience of managing large bills, such as rent.

The DWP has been working with Crisis on a pilot project in Newcastle whereby people who have been homeless or who are at risk of homelessness because of arrears can have their claimant commitment relaxed while they focus on their housing situation, and they are also offered the opportunity to have their housing support paid directly. Will the Minister, as a matter of urgency, consider issuing guidance to work coaches to identify people who may be in rent arrears and proactively offer them direct payment of housing support? Claimants often appear to be unaware that it is possible for this to be done.

Landlords themselves do not appear to think that the changes announced in the Budget are enough. In a survey carried out by the Residential Landlords Association into the reaction of private landlords to the changes to universal credit, 64% of private landlords said the changes did not give them more confidence to let properties to tenants in receipt of universal credit.

Overall, one of the key reasons for arrears is the level of local housing allowance. LHA rates simply have not kept up with sharply rising rents. They were first cut by the coalition in 2011, and then increases were capped at 1% in both 2014-15 and 2015-16. A freeze was introduced in April 2016, which will last until 2020. According to research by the Chartered Institute of Housing, private sector rents in England grew by an average of 14.6% from May 2011 to May 2017, while wages increased by only 10% in the same period.

That inadequate housing support continues in universal credit. In fact, there is no housing support at all in universal credit for people aged between 18 and 21, unless they are in one of the groups of people who are protected, such as care leavers. Also, the national living wage is set at a lower rate for people under the age of 25, and the chief executive of the Financial Conduct Authority has recently warned about the high levels of debt being incurred by young people just to cover basic household bills such as rent.

[Dr Drew]

Will my hon. Friend give way briefly on that point?

[Margaret Greenwood]

I am sorry, but I am really short of time and so cannot give way.

We are all shocked by the sight of people sleeping in the streets. Will the Government think again and restore housing support in universal credit for people aged between 18 and 21?

Overall, the number of working households claiming housing benefit in the private rented sector has more than doubled since 2009. We know that many people, especially many young people, have not just been priced out of home ownership but are finding that their income does not even cover their rent. The DWP’s own data show that only 7% of private renters claiming housing benefit are unemployed and seeking work. The rest are either already working on low incomes or are currently unable to work.

Just last week, it was reported that the Stop Start Go charity in Manchester has opened new bedsit accommodation for working people who are homeless because they cannot afford the cost of accommodation in the city. On one night in December, a third of people sleeping at the Booth Centre for the homeless in Manchester were actually employed. The DWP’s own data show that the number of people in work who are being placed in temporary or short-term accommodation rose from 15,500 in August 2013 to more than 22,000 by 2015. Research by the Joseph Rowntree Foundation found that the private rented sector has grown by a third over the last 12 years, but the number of tenants being evicted has also grown; 7,200 more tenants lost their homes in 2015 than in 2003.

Labour is committed to increasing the national living wage to £10 an hour across the age range; to building at least 100,000 council and housing association homes for genuinely affordable rent or sale; and to reforming universal credit so that it meets its original principles of making sure that work pays and reducing poverty. Labour will also end insecurity for private renters by introducing controls on rent rises, as well as introducing more secure tenancies, landlord licensing and new consumer rights for renters. That is the real way to make work a route out of poverty and to reduce the need for people to claim housing support.

The Government simply refuse to recognise the scale of the shortage of truly affordable housing that exists. At the same time, they are failing to provide housing support at a level that will at least enable people to cope with the consequences of Government inaction and to meet rising rents. In the Budget, the Chancellor conceded:

“House prices are increasingly out of reach for many”.—[Official Report, 22 November 2017; Vol. 631, c. 1057.]

Yet he offered more of the same on housing. There was no new Government investment in affordable homes and nothing for private renters. The need for someone to have a roof over their head—a home where they can bring up their family—is a basic human need. By 2021, it is estimated that some 7 million people will be claiming universal credit, more than half of whom will be in work. Where will they live if their wages do not cover their rent and housing support does not make up the shortfall? It is time for the Government to heed the warnings from landlords, the voluntary sector and Opposition Members, and to pause and fix universal credit.