Housing Benefit

Debate between Douglas Alexander and Steve Webb

Tuesday 9th November 2010 Commons Chamber

[Mr Alexander]

I am going to make a little more progress.

There is a substantive question, and that is: on what evidential basis do the Government assert that rents will fall? In the debate involving the Bishop of Leicester last week in the other place, the Under-Secretary of State for Communities and Local Government, Baroness Hanham, in response to being challenged directly on the evidence that the Government could adduce for a fall in rents as a result of the changes, said that it was a “suggestion”.

[The Minister of State, Department for Work and Pensions (Steve Webb)]

I think that the shadow Secretary of State is a measured and reasonable man who will not want to be hysterical but will want to look at the facts. Since November 2008 private rents have fallen by 5% and local housing allowance rents have risen by 3%. LHA is pushing rents up. Does he accept that?

[Mr Alexander]

I have already covered the point that LHA is calculated in relation to rent in the private rented sector. The Minister generously characterises me as a reasonable fellow, but the fact is that this is the second time in as many days that a coalition Minister has accused the Government’s critics of being hysterical. I think that it was the Secretary of State for Communities and Local Government who yesterday told London councils, when perfectly reasonable questions were being asked, to “grow up”. I hope that when the Secretary of State for Work and Pensions speaks in this debate we will have a more measured and reasonable account of why the policies have been decided on and of whether the Government are willing to reflect on the points being raised, and in turn change their mind.

--- Later in debate ---

[Mr Douglas Alexander]

I shall resist the temptation of suggesting that the one person who should be dispatched from Sheffield is the Deputy Prime Minister. I acknowledge the fact that in communities such as Sheffield, and in cities across the whole of Britain, there is deep anxiety and concern about the impact of these changes. That is why the Local Government Group agreed that the move to the 30th percentile is

“ likely to increase homelessness costs,”

since it will diminish

“the willingness of private rented sector landlords to let to housing benefit customers. This will have hugely variable and disproportionate effects on different parts of the country.”

The Government’s impact assessment of the 30th percentile change goes into great detail to demonstrate that at least 30% of the market is available in every area. However, is it not the case that the inevitable consequence of the LHA cap and the CPI cap is that, over time, the proportion of the available market will shrink below 30%?

Finally, let me come to one measure that has absolutely nothing to do with welfare reform and everything to do with a welfare cut. The Government propose that someone who is doing everything that we would ask of a person on benefits—applying for jobs, going to interviews, and even getting on the Secretary of State’s famous bus from Merthyr Tydfil—will still lose 10% of their housing benefit if they cannot find a job within a year.

Let me unpick the statistics in two communities. Wolverhampton has six claimants for every job. If they were to be sanctioned tomorrow on housing benefit, 1,116 families would lose 10% of their benefit. To take Norfolk, a very different community from Wolverhampton, the figures say that there are 5,000 jobs, mainly casual, and 15,600 claimants—and that under these rules, 1,254 families would be sanctioned tomorrow. How can such an approach be fair when there are five claimants chasing every vacancy in the British labour market?

On Sunday, the Secretary of State’s colleague, the Chief Secretary to the Treasury, stated:

“Sanctions in the welfare system only apply when people don’t take advantage of the help and support that is on offer.”

Such a statement is irreconcilable with the policy that the Treasury has now imposed on the Department for Work and Pensions. I have to say to the Secretary of State, for whom I feel great respect, that he is losing even old and dear friends as he tries to defend the measures that he has signed his Department up to. Indeed, when Bob Holman, the man who brought the right hon. Gentleman to Easterhouse in 2002, was asked why the Secretary of State had changed track, he said:

“It is hard to say. I think he has come very much under the influence of George Osborne, who is very much more aggressive, who is much more anti-working class and I think that Iain probably is looking at it—if I am to get my big reform through, the universal credit system, I’ve got to go along some way with the attitude of Osborne.”

Indeed, how does the right hon. Gentleman want the unemployed to answer the question originally asked by Norman Tebbit? The truth is that homes are cheaper where there are fewer jobs. Should the jobless from Middlesbrough move to London where there may be jobs but fewer homes, or should the homeless from London move to Middlesbrough where there are homes but fewer jobs? I hope that the Secretary of State will take the opportunity to answer that question in the course of his remarks.

The right hon. Gentleman once styled himself as “the quiet man”. I simply cannot believe why, given all the work he has done over recent years, he stayed silent in his conversations with the Chancellor when the latter told him that this was a progressive move to help people into work. It is the very opposite of a progressive move. The party that once said that unemployment was a price worth paying now wants to fine the unemployed if they cannot find a job. We were guaranteeing work for the long-term unemployed, but the Conservative party seems to be threatening them with homelessness.

[Steve Webb]

My eyes may deceive me, but I sense that the shadow Secretary of State is on the final page of his speech. He must have dropped a very long section in which he was to set out Labour’s alternative. Perhaps he will do that now.

[Mr Alexander]

It might help the hon. Gentleman if he recognised that as he has chosen to align himself with the Conservative party in government, it is now his responsibility to answer the questions. I know that, as a former professor of social policy at the university of Bath, he is a man of great erudition and deep thinking. May I commend to him the speech I made on Friday in which I went through each of the measures and set out our thinking, as I have done on a range of them today?

We disagree fundamentally about the balance between the cuts that have to be borne by the poor and the vulnerable relative to the contribution that should be made by the banks. So we disagree about the deficit. We also disagree with measures such as the 10% cut in housing benefit relative to jobseeker’s allowance—[Interruption.] What do we support? In the March Budget we made it clear that we wanted to take the top rental—forgive me, Mr Speaker. I should not get into a debate with someone who is sitting down. I shall address you, Mr Speaker. We have made it clear that we could support a phased approach to caps, and that we want to look into regional caps. We have made it clear that we are willing to consider the proposal—once we receive an impact assessment—on the deductions available for non-dependent individuals living in households that receive housing benefit. We have also made it clear that we regard the 10% cut in housing benefit for those who have been unemployed for a year as completely unacceptable—and in his previous persona, I fear, the Minister would have found them unacceptable as well.

I need to draw my remarks to a conclusion, as was kindly anticipated by the Minister. Let us be honest: this package of rushed, ill-considered and potentially devastating cuts has raised concerns beyond the debates in this Chamber in communities across the country. In the 1980s, the previous Conservative Government showed that higher homelessness, like longer dole queues, ends up costing the taxpayer more, not less. These ill-thought-through proposals have already led a number of MPs of conscience and concern, on both sides of the House, to register their disquiet. I do not claim a monopoly of concern about the proposals for any one party. Perhaps that is why the Government have run scared of putting an amendment to the House today endorsing explicitly each of the present proposals on housing benefit that they continue to advocate. Fortunately, however, there is still time for the Government to think again about these proposals. I urge Members on both sides of the House to take the opportunity this evening to reflect on these changes, and I commend the motion to the House.

--- Later in debate ---

[Steve Webb]

When there are specific instances of vulnerable people about whom local authorities have concerns, those local authorities have discretion to do something about the situation. But when people might reasonably be expected to move, that, of course, is part of the equation. If everybody went on staying exactly where they were at the same rent, there would have been no point to the policy.

On the basis of the debate so far, Mr Speaker, you would imagine that this year’s £21.5 billion housing benefit budget was about to be slashed. [Interruption.] Labour Front Benchers are saying that it is.

[Mr Douglas Alexander]

indicated dissent.

[Steve Webb]

Sorry; the shadow Secretary of State is disowning the right hon. Member for Greenwich and Woolwich (Mr Raynsford), who got it wrong. In 2014-15 the housing benefit budget will have been “slashed” from £21.5 billion to £22 billion. We are not slashing. We are making changes.

It has been said that we are being too hasty. The Labour party has decided that after 13 years of making the problem worse, doing something about it is “hasty”. Labour was so unhasty that it never got round to doing anything about the problem before it lost office. We are getting a grip.

First, we have established that the impact of the changes has been grossly exaggerated. Secondly, we have established that rents will not stay as they are. During the debate it has been suggested that the fact that the British taxpayer is putting more than £20 billion a year into housing benefit has no impact on the market. We, the taxpayers, pay housing benefit towards 40% of private rented tenancies. It is a long time since I studied economics, but I reckon if we pay for 40% of the tenancies and we put £20 billion a year into the market, we might just be having some impact.

Oral Answers to Questions

Debate between Douglas Alexander and Steve Webb

Monday 18th October 2010 Commons Chamber

[Steve Webb]

My hon. Friend is right. Excess winter deaths are a scandal. That requires work across Departments, as well as our commitment to the winter fuel payment and the cold weather payment system. We are working with our colleagues not just in the Department of Health, but the Department of Energy and Climate Change, because proper home insulation is a key to tackling excess winter deaths.

[Mr Douglas Alexander (Paisley and Renfrewshire South) (Lab)]

Last week the Prime Minister said he stood by the pledge that he made during the election about retaining the winter fuel allowance. I note with interest the answer given by the Minister. Will he confirm, for the avoidance of doubt, that everyone who is today entitled to the winter fuel allowance will still be entitled to it on Thursday?

[Steve Webb]

I cannot pre-empt the outcome of the comprehensive spending review, but I refer the right hon. Gentleman to the wording of the coalition agreement, where we say that we are committed to protecting the winter fuel payment.