Rent Officers (Housing Benefit and Universal Credit Functions) (Local Housing Allowance Amendments) Order 2015

Debate between Emily Thornberry and Justin Tomlinson

Monday 23rd November 2015 General Committees

[Justin Tomlinson]

Let me ponder that question and come back to it.

The Government recognise that some places will see high increases in rents, so we have made provision to help those areas. Over this Parliament, 30% of the savings generated from the measure will be recycled and used to create more targeted affordability funding, which will be used to reduce the gap between frozen LHA rates and the 30th percentile reference rent in areas of the greatest rental growth, building on the £140 million already distributed since 2014.

Hon. Members may be aware that in 2015-16 we have increased 191 LHA rates by 4%, instead of the uprating limit of 1%, using the targeted affordability funding. More than half of the LHA rates in London—41 out of 70—received the extra increase. The funding has also benefited other parts of the country such as Manchester and Aberdeen.

[Emily Thornberry]

The Minister just referred to 41 areas receiving this additional funding. Is he telling the Committee that in those 41 areas, people can rent anything in the bottom 30th percentile of properties in the local authority, within the limits of housing benefit?

[Justin Tomlinson]

That is why the additional funding was provided—to make up the difference in those particularly high rental growth areas.

[Emily Thornberry]

The Minister will appreciate, however, that it did not.

[Justin Tomlinson]

I will come to the stats. I will not forget that point, as it has already been mentioned.

In 2016-17, the effect of freezing LHA rates will be the same as it would have been if rates had been uprated by CPI inflation due to the level of CPI forecast in September. As a result, LHA rates would not increase in 2016-17 but would mostly remain at the 2015-16 levels. As there is currently no inflation in the economy, no savings will be made from the freeze in 2016-17 and there will therefore be no targeted affordability funding for that year. Targeted affordability funding will, however, be available from the savings for subsequent years, up to and including 2020-21.

From 2017-18, we will use the targeted affordability funding to support areas where higher rent increases are causing a shortage of affordable accommodation. The amounts of targeted affordability funding available each year from 2017-18 and our plans for how we distribute it will be announced as part of the review of the order in future years.

In the summer Budget, the Chancellor of the Exchequer announced that an enhanced package of £800 million of discretionary housing payment funding will be made available to local authorities over the next five years to provide support to the most vulnerable claimants affected by housing benefit reform, including this measure. That was a 40% increase on what was previously offered. I can also reassure hon. Members that alongside the LHA rates, we will continue to publish the 30th percentile of market rents in each area, as we have previously, so that they can be scrutinised.

To pick up on some of the specific questions that were asked, I absolutely agree that the biggest challenge is demand outstripping supply. Addressing the lack of affordable housing is therefore a real priority. There has been a welcome announcement of an extra £1.45 billion to be spent creating an additional 43,000 affordable homes in London by 2018.

[Emily Thornberry]

I wonder if the Minister could assist us with those affordable housing statistics. Will those affordable homes be in the bottom 30th percentile? Will they be within reach of housing benefit? If we are talking about housing benefit and affordability, surely the two should be in line.

[Justin Tomlinson]

We do not control housing prices, but clearly the quicker we can get these new houses, the bigger the difference they will make. Across the country, we expect at least another 275,000 affordable homes to be built before the end of the Parliament. Through the new homes bonus, we provide additional incentives to local authorities to increase the provision of affordable homes, so they get paid more than just six times the value of the council tax. Our extension of the right-to-buy policy will also result in new housing stock being brought in.

I was asked whether the policy had resulted in rental prices falling. In some areas it has, and in some it has not. We know that 27% of landlords have been negotiating; that figure is as high as 47% in London. On the point about whether there will be ghettos and whether people will suddenly disappear, 79% of those who moved during this period moved within 5 miles, and the vast majority did so for personal rather than financial reasons. If we look at the broader picture, we see that 93% stay within their region.

There have also been behavioural changes. Two hundred people a week are coming off housing benefit because of a combination of rising wages in our growing economy, the 2 million new jobs that have been created, the negotiations that have taken place and, in some cases, the fact that rents have been reduced. Therefore, keeping the economy going in the right direction remains a key priority. In response to another point that was raised, the broad market areas take into account local amenities such as schools, shops, hospitals and transport, and there can be quite a broad range of rental prices within an area.

I commend the order to the House.

Oral Answers to Questions

Debate between Emily Thornberry and Justin Tomlinson

Monday 2nd November 2015 Commons Chamber

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

The Tory-Liberal Democrat Government tried to cut housing benefit some nine times. Since May, the Government have been trying again. All this has achieved is a massive increase in the number of homeless families in temporary accommodation, the largest housing benefit bill we have ever seen, and huge amounts of discretionary housing payments being given to local authorities. I am sure that it has occurred to the Minister—he is an intelligent man—that the answer is to build more real affordable housing. Would he like to have a quiet word with the Department responsible and ask it to pull the Housing and Planning Bill, because it will simply result in the sell-off of more and more affordable social housing?

[Justin Tomlinson]

The right-to-buy policy is a deal that we have secured with housing associations to give tenants the right to buy. The homes will be sold on a one-for-one basis, which creates new, modern stock and additional jobs. People who work hard should not be blocked from a chance to own their home, which I very much support.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Disabled People (Justin Tomlinson)]

We are working closely with Motability to put in place a package of support for those who lose their eligibility. Claimants will be able to keep their vehicles for almost two months and most claimants receive a one-off payment of up to £2,000 to maintain their mobility. In addition, we have reformed the DWP appeals process with the introduction of the mandatory reconsideration. This enables disputes to be addressed more quickly. Finally, Her Majesty’s Courts and Tribunal Service continues to focus on reducing waiting times, and I would be happy to work with my hon. Friend further to see what progress can be made.

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

Given the considerable disquiet in the country about cuts to tax credits, not to mention the alarm on the Secretary of State’s side of the House, where 20 of his own MPs have said that the Government are in danger of cutting a lifeline to working families, does he now regret describing tax credits as a “bribe”?