Housing Benefit

Emily Thornberry Excerpts

Wednesday 13th October 2010 Westminster Hall

[Emily Thornberry (Islington South and Finsbury) (Lab)]

Given that we are talking about intent, does my right hon. Friend agree that it is possible that the Government’s intent is not fairness and that, instead, as we are told a senior Minister has said, this is all about highland clearances?

[Margaret Hodge]

I agree entirely. There are several quotes in the press from senior civil servants demonstrating that they think the proposal will create the greatest dispersal of families that has been witnessed probably since the 19th century. Perhaps that is part of the political intent of the Government.

In my view, the litany of cuts that I have outlined—all of them, not just the housing benefit cuts—represent an historic assault on the poorest families in the poorest communities, which I think even Baroness Thatcher would have considered to be a bridge too far.

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[Bob Russell]

Let us put on the record that there are some very good landlords. Good landlords would endorse the points that have just been made. It is the rogue landlords—those who exploit their fellow human beings—who we need to deal with. Successive Governments have failed to address that matter.

I come back to the question of supply and demand. Thirty years ago in Colchester, there was no such thing as homelessness. People could be guaranteed a council house within six months to a year, depending on their location of choice. The right to buy was not the real problem; the real problem was the failure to replace with new stock the houses that had been sold. Successive Governments failed to deal with that.

It has been said that we must not use extravagant language and say that the proposals will result in the biggest forced social movement of people since the highland clearances because that is emotive and there is no comparison with that situation. I do not wish to give any comparisons of that sort; it would be wrong to do so. However, it is a fact that if there are benefit changes and the housing cap goes through, the forced migration of whole communities—or a large number of people from a particular community—will take place. Families, pensioners and children will be removed from the communities in which they grew up. That will have a devastating effect on their lives. I want to concentrate on the effect on children because, as I am sure colleagues have realised, I have been picking up on that angle since the general election.

[Emily Thornberry]

I agree with the hon. Gentleman that it is unfortunate when extreme language, such as the reference to the highland clearances, is used. However, did he read in the papers at the weekend that a senior Conservative Minister in the Government described the policy as exactly that? They said that we will not have seen anything like it since the highland clearances. Such references are emotive, but they may be entirely descriptive.

[Bob Russell]

I do not think that our Scottish colleagues would accept that comparison, but the point being made is that people will be forced from their homes against their will. In the previous debate that I secured, I referred to that as economic cleansing. Of course, those families that stay put in their houses and struggle on with higher rent will have less disposable income to spend in local shops and on local services, which will have an impact on their local economies.

Children will be forced out into the suburbs or elsewhere, and it is important to remember that this is not just a city phenomenon, but one that can have an impact in rural areas. It will also have an impact on schooling, as there will be depopulated schools in some areas, because of the forced removal, and overcrowded schools in others, assuming that parents can find the places.

I know that other Members wish to speak so I conclude by quoting from one section of the excellent briefing that I was sent by Scope:

“An unemployed or low-income lone parent or couple with one child (or two children who share a room) is likely to lose around £500 a year once this reform takes effect…These reductions are likely to have a disproportionate impact on disabled people…those living in cities and urban centres with higher property costs—especially London—will be particularly affected…a reduction in the financial support that Housing Benefit provides will further reduce the number of suitable properties disabled people can afford, increasing the risk of them having to live in inappropriate housing, exacerbating their social isolation and dependence on other forms of support.”

I recognise that the coalition Government inherited serious financial problems that they need to tackle, but nowhere in the coalition agreement does it say that poor families should be forced out of their homes or that children in disadvantaged families should be further disadvantaged.

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[Jeremy Corbyn (Islington North) (Lab)]

Thank you, Mr Gray. I will be brief so that everyone can contribute to the debate.

I welcome the debate and congratulate my right hon. Friend the Member for Barking (Margaret Hodge) on securing it, on what she said this morning, and, in particular, on her successful annihilation of the British National party in the general election, which she did on behalf of all of us.

As Members know, I represent Islington North, which is an inner urban constituency. It is perceived by the Daily Mail and Daily Express to be the fountain of all things that are bad in our society. The perceptions are of liberal intelligentsia, cappuccino society and restaurants where new Labour used to meet. I personally have never had anything to do with new Labour whatsoever, so I take no responsibility for that.

Unfortunately, that image has placed itself in the public eye as being fact but, in reality, it is not. My hon. Friend the Member for Islington South and Finsbury (Emily Thornberry) and I represent a borough which is the eighth poorest in the country. It has a large number of people living in council or housing association accommodation, a large number of people living in private rented accommodation, and probably one of the lowest levels of owner occupation in the country. I believe it is now down to about 30%, which is less than half the national average. The number of people living in private rented accommodation has gone up by a huge amount and now represents more than 30% of the population. They are not all on housing benefit, but some are.

The local authority has a huge housing problem to deal with, but, in the long term, it can be addressed only by purchasing existing properties and converting them into flats, where appropriate, and by building new properties where land becomes available, which is a huge problem in inner London. Indeed, during an earlier incarnation as chair of housing in Islington, my right hon. Friend the Member for Barking managed to secure the purchase of a large number of street properties which were then converted into flats and remain so, so Islington has many street properties. Also, she presided over a considerable level of council house building in the early 1980s, despite huge opposition from the then Conservative Government, so it is not that enormous efforts have not been made to try to address the issue of housing stock.

However, as in every other borough, nothing had been done in the way of major repairs before 1997 because of central Government cuts, as my right hon. Friend the Member for Greenwich and Woolwich (Mr Raynsford) said. The council was reduced to doing repairs only if tenants took legal action against it to get them done, and that was normal throughout London at the time. I accept the criticisms made by the hon. Member for Colchester (Bob Russell) about the lack of new house building, but he should recognise the enormous repair problem that was left to the incoming Labour Government in 1997, and also recognise that decent homes standards have made a difference.

I have discussed the problems of housing benefit in countless debates; indeed, many Members in the Chamber today have taken part in them. This nation spends a vast amount of money on housing benefit, but I have no problem whatsoever with the principle of it. I absolutely support it, and where housing benefit is paid to people living in council or housing association accommodation, it is all straightforward.

What annoys me beyond belief is when two successive families come into my advice surgery—I shall not reveal names, as that would not be appropriate—family A lives in a council flat and gets housing benefit for the full rent, which is around £100 per week, and family B, who could be living next door in an identical flat with identical social conditions, receives housing benefit of £250, £300 or £350 a week. Why the difference? It is because family B’s flat was bought from the council under right to buy, possibly with a large discount. Someone is able to live off the private rent paid for by housing benefit. That is wrong, and the Government must deal with it, but the problem cannot be addressed by punishing the tenant or attacking people who are in receipt of housing benefit, which is exactly what the Government are trying to do by introducing a housing benefit cap.

What is likely to happen in my community and in the communities of others here today, particularly inner-London Members, is that large numbers of our constituents on a low wage, income support or jobseeker’s allowance and in receipt of housing benefit, will be faced with a horrible choice. The housing benefit will be cut, but the landlord will refuse to lower the rent. They will then be faced with a terrible choice. Do they take the children out of school? Do they move away from the area where their family live, where they may be caring for an elderly relative, where they have community links, where they have their general practitioner or local hospital? They have that kind of social support network, but they will have to try to find a private rented flat somewhere else, some distance away.

[Emily Thornberry]

My hon. Friend speaks extremely well on behalf of Islington, but may I chip in with this? One argument put forward is that the housing benefit cuts will result in rents dropping, but may I point out to the Minister, who may not know this—I know that my hon. Friend does—that only 12% of Islington’s private rental sector receives local housing allowance? Therefore, if the benefit were cut, the market would simply move on to other people. If we wish to push down rents in the private rented sector, we cannot do it by cutting housing benefit. I would suggest that the Minister listen carefully to my hon. Friend, because the points that he is making are extremely valid, particularly in respect of Islington.

[Jeremy Corbyn]

Absolutely. My hon. Friend understands the borough very well. That is the situation, and I suspect that it is exactly the same in Hammersmith and Fulham, Westminster and many other inner-London areas. There is enormous demand. This is a fast-growing, vibrant city where there is huge demand for private rented flats. The effect of the proposals will be social cleansing of the poorest people out of what are perceived to be high-cost areas. Like other boroughs, Islington is subject to the peculiar combination of being high cost but poor at the same time. That does not apply in the whole country, but it certainly does in London, and I hope that the Minister will at least begin to understand that.

Islington council cannot house all the people on the waiting list by any manner of means. There are 8,000 families on it at present, and serious overcrowding problems in existing council and housing association accommodation. A small amount of building has been started—I wish it well and welcome it—but I suspect that, after the Chancellor makes his statement, there will be an end to all council house building in this country, unless I have been misled by the media, which, of course, is possible.

I ask the Minister to look at the issue and deal with it in an intelligent, rational and humane way. He should not place a cap on housing benefit but instead look at the exorbitant private sector rents that are charged and introduce at least some form of appeal system against excessive rents. As my hon. Friend the Member for Islington South and Finsbury said, if people are moved out of private rented accommodation, somebody else on housing benefit or housing allowance will not be moved in. The property will be filled by someone from the open market, because that is the reality of the situation.

James Murray, the executive member of Islington council who deals with housing, made an excellent submission to the Work and Pensions Committee, in which he states:

“Islington is a high demand area, with some of the highest private sector market rents…With over 8,000 people on its housing register, and demand for social housing far outstripping its supply, the borough relies heavily on the private rented sector to help house its residents.”

Islington has placed, through the rent deposit scheme, large numbers of people in the private rented sector on an agreed rent, but all those arrangements will disappear. Islington has tried to co-operate with the private sector in doing that and calculates that,

“Over the past 18 months 228 of the 422 households placed through the rent deposit scheme will be adversely affected by the caps.”

The answer is to recognise the housing needs of people in London and the social damage of overcrowding and homelessness, not punish the tenants and victims, and instead—I agree with the hon. Member for Colchester —build as many properties as rapidly as we can and deal with excessive rents, bad conditions and bad landlords, of whom, unfortunately, there are still far too many all over London. It breaks my heart when people living in vermin-infested flats, which we the public are paying several hundred pounds a week in rent for, come to see me. Such tenants feel that they have no rights and feel excluded. Their children are suffering educationally, from overcrowding and everything else.

We need a decent, fair society. The Prime Minister claims that we are all in it together, but I do not believe that he really thinks that, because if he did he would be doing something about the disgraceful way that many private sector tenants are treated. Support the tenants; do not bail out the landlords.

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[Steve Webb]

Like the right hon. Lady, I am keen to have a sensible debate on this subject. She mentioned the evidence that the Mayor of London has produced. The Mayor met my right hon. Friend the Secretary of State towards the end of September, and we are in close dialogue with London local authorities and others so that we do understand the implications of the changes.

With regard to turnover in the private rented sector, the local housing allowance scheme only came in just over two years ago, in April 2008, and 75% of private rented sector cases are now within the scope of that scheme. There is huge turnover of people. People are making decisions about new—

[Emily Thornberry]

Will the Minister give way?

[Steve Webb]

No. People are making decisions about new tenure choices all the time, and we are saying this: why should those whose rents are wholly paid by the taxpayer not face the same constraints as those who are in low-paid work? I take the point made by the hon. Member for Westminster North that the two are not distinct categories; there is movement between the two. However, people in low-paid work are not choosing to live in the most expensive parts of the city, because they know that they would have to be able to pay those rents out of their wages. Why should people on benefit be in an advantageous position, in terms of their housing choice, compared with those in low-paid work? That simply is not right.

I am convinced that nothing in my language or my ministerial colleagues’ language is about clearances or scroungers. That is not what we are talking about. We are talking about value for money for the taxpayer, including the low-paid taxpayers in the constituencies of each hon. Member present, whose taxes are going to subsidise those exorbitant rents. Although we have heard that those very high rents are exceptional, I was appalled when I discovered that the 5,000 families to whom we pay the most housing benefit cost the taxpayer an annual £100 million—5,000 families receive £100 million a year just in housing benefit, leaving other benefits aside. It cannot be right that low-paid workers in our constituencies, people dealing with child poverty and disabled people are paying taxes to pay those rents.

My hon. Friend the Member for Colchester asked about the position of disabled people. One of the changes that has not been reported is the improvements to the system of housing benefit for disabled people who need a non-resident carer. We are spending an extra £10 million on writing off that extra bedroom in the housing benefit assessment, because we recognise the particular needs of disabled people.

These are huge issues and it is disappointing to have only a few moments to respond to them. The crucial consideration is to be fair—yes, to people on benefit, but also to the low-paid taxpayers whose taxes are paying for these things. If we simply pay the full, very high rents, we make it very difficult for people to take work, which will ultimately be the best antidote to child poverty and the best long-term prospect for people. That is the goal of the reforms.