Housing Benefit

Debate between David Lammy and Steve Webb

Tuesday 9th November 2010 Commons Chamber

[Steve Webb]

Thank you, Mr Speaker.

Housing benefit will be reformed so that we do not subsidise people to live in the private sector on rents that other ordinary working families could not afford. When we do that, Labour Members are against it. When we propose a cap, they are in favour of it —until we set a figure, and then they are against it. When we propose to cut non-dependant deductions they are in favour of that—unless it actually affects anyone. The shadow Secretary of State said that he wanted regional caps, when the cap would principally affect central London, because he does not want a cap that actually caps anyone. What we need are credible Opposition propositions, not opportunism.

Three main themes have emerged from the debate. The first is that the impact of these changes has been grossly exaggerated. As my right hon. Friend the Secretary of State said at the beginning, talk of highland clearances and the final solution is a disgrace. My hon. Friend the Member for Wolverhampton South West (Paul Uppal) pointed out how offensive such language is to people, but even in this debate we have heard talk of highland clearances, and of Paris.

The right hon. Member for Tottenham (Mr Lammy) does not seem to appreciate that in substantial parts of central London—in the borough of Southwark, for example—48% of properties are in the social rented sector, and will not be affected by either the cuts or the percentiles. The suggestion that central London will be devoid of people on low incomes is complete nonsense. If the right hon. Gentleman wants to correct himself, he is welcome to do so.

[Mr Lammy]

The Minister proposes to increase social rents to 80% of private rents, which will lead to a removal of poor people from central London. The Minister knows that.

[Steve Webb]

I do not think that the right hon. Gentleman has followed the proposition. It involves new houses and new build. People in existing tenancies do not face that change.

We have heard talk of the impact of these changes. I appreciate that it is a shame to introduce facts at 9.45 pm, but I shall give it a try. As was pointed out by the Chairman of the Select Committee, the hon. Member for Aberdeen South (Miss Begg), this is not just a London issue, but obviously the impact of the cap will be felt particularly in London. There are 400,000 people on housing benefit in inner London, which ought to be where the impact will be greatest. Of those, 313,000, or 77%, will be unaffected because they are in social tenancies, and a further 30,000, or 7%, will be unaffected because they are in the non-local housing allowance sector. That adds up to 84%. A further 6% receive local housing allowance, but will not be affected. That means that 90% of people on housing benefit in central London will not be affected at all, while another 3% will be affected by less than £10 a week.

The mistake made during the debate is that people have assumed that any shortfall is equivalent to homelessness. That is a ludicrous leap. We know that people experience shortfalls in a number of ways. Of all the people on housing benefit in central London, 7% will experience shortfalls of more than £10 if there is no change in rents.